Morning Commentary: Diamondback Energy, CyrusOne, Virginia Power offer notes; Intel eyed

By Cristal Cody

Tupelo, Miss., Nov. 20 – Diamondback Energy, Inc. announced a three-part offering of senior notes early Wednesday after holding fixed income investor calls in the previous session, according to a market source and a 424B5 filing with the Securities and Exchange Commission.

The deal includes five-, seven- and 10-year tranches.

Also, CyrusOne LP and CyrusOne Finance Corp. are marketing five- and 10-year split-rated registered senior notes (Ba1/BBB-/BBB-) on Wednesday following investor calls held Monday, sources report.

Initial price talk on the five-year tranche is in the Treasuries plus 160 basis points area.

The 10-year notes are initially talked to price with a spread in the 200 bps over Treasuries area.

In addition, Virginia Electric and Power Co. is offering 30-year senior notes in the high-grade primary market during the session.

More than $12 billion of investment-grade bonds have priced week to date.

About $25 billion of issuance is forecast for the week, according to syndicate sources.

Coming up, a possible deal is being eyed from Heineken NV, which will hold fixed income investor calls on Thursday via J.P. Morgan Securities LLC, a source said.

Deal volume so far this week has been led by Intel Corp.’s $2.75 billion two-tranche sale of senior notes on Monday.

In the secondary market, Intel’s senior notes (A1/A+/A+) traded better early Wednesday, a market source said.

The company’s $1.25 billion of 2.45% notes due Nov. 15, 2029 climbed to 100.31 after going out on Tuesday at 100.22.

The notes priced at 99.868 to yield 2.465%, or a spread of 65 bps over Treasuries.

Intel’s 3.25% notes due Nov. 15, 2049 were seen stronger at 101.49 in early trading, up from 100.702 on Tuesday.

The 30-year notes priced in a $1.5 billion tranche on Monday at 99.943 to yield 3.253%, or Treasuries plus 95 bps.

Otherwise, market tone was risk-off over the morning with focus on the impending release of the minutes from the Federal Reserve’s October policy meeting, a source said.

On Oct. 30, the Federal Reserve announced a rate cut of 25 bps to lower the target range for the Federal Funds rate to 1.5% to 1.75%.

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