Morning Commentary: High-grade supply ramps up; Intel, Coca-Cola, Moody’s offer bonds

By Cristal Cody

Tupelo, Miss., March 20 – Friday is set to see significant primary action with companies including Intel Corp., Coca-Cola Co., EOG Resources, Inc., Moody’s Corp., Charles Schwab Corp., Ecolab Inc. and Appalachian Power Co. marketing bond deals.

Intel plans to bring six tranches of fixed-rate senior notes to the primary market.

Coca-Cola is on deck with five-, seven-, 10-, 20- and 30-year fixed-rate notes.

EOG is marketing three tranches of fixed-rate senior notes.

Moody’s is offering fixed-rate senior notes.

Charles Schwab plans to price a two-part offering of fixed-rate senior notes.

Ecolab is offering fixed-rate notes.

Appalachian Power intends to sell fixed-rate senior notes.

In addition, Landeskreditbank Baden-Wurttemberg-LBank Corp. announced plans to price notes due March 30, 2022. The notes are guaranteed by the German Federal State of Baden-Wuerttemberg.

Friday’s session will mark the third session this week that has seen investment-grade issuance.

High-grade companies priced more than $18 billion of bonds on Thursday and over $27 billion of bonds on Tuesday.

The stock market traded better over the morning on Friday after modest gains on Thursday and enhanced responses from the U.S. government in stemming disruption caused by the coronavirus. The Dow Jones industrial average was up 0.99% and the Nasdaq had improved 1.87% by mid-morning.

Treasury yields mostly declined early Friday, sending the benchmark 10-year note yield back below 1%. The benchmark 10-year note yield fell 12.2 basis points to 0.997%.

New issues that priced on Thursday were modestly improved in secondary trading, a source said.

Financial paper priced from JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. all firmed about 3 bps.

JPMorgan Chase priced $2.5 billion of 4.493% fixed-to-floating rate senior notes due March 24, 2031 (A2/A-/AA-) at a spread of Treasuries plus 340 bps.

Initial price talk was in the Treasuries plus 350 bps area with guidance firmed to the 345 bps area, plus or minus 5 bps.

Morgan Stanley (A3/BBB+/A) sold $2 billion of 5.597% global medium-term fixed-to-floating rate senior notes due March 24, 2051 at par to yield a spread of 375 bps over Treasuries.

Initial price talk was in the Treasuries plus 375 bps area.

Citigroup priced $1.3 billion of 5.316% fixed-to-floating rate senior notes due March 26, 2041 (A3/BBB+/A) on Thursday at a spread of Treasuries plus 350 bps.

The notes priced on top of talk in the Treasuries plus 350 bps area.

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