Morning Commentary: JPMorgan, RBC, LYB International, World Bank offer high-grade notes

By Cristal Cody

Tupelo, Miss., April 15 – Financial supply is set to price over Wednesday’s session on the heels of first-quarter earnings releases, according to market sources.

JPMorgan Chase & Co. (A2/A-/AA-) released its earnings report on Tuesday and plans to tap the primary market on Wednesday with four tranches of fixed-to-floating rate notes.

The deal includes six-year notes talked to price with a spread in the Treasuries plus 185 basis points area, 11-year notes talked at the 200 bps area, 21-year notes guided to print in the 195 bps spread area and 31-year notes talked at the 200 bps over Treasuries area.

Royal Bank of Canada, which released its first-quarter results in February, also is on deck with three-year notes (A2/A/AA) that are talked to price at the Treasuries plus 155 bps area.

Earnings releases continue on Wednesday with reports due from Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc. and U.S. Bancorp.

In other issuance expected on Wednesday, LyondellBasell Industries NV subsidiary LYB International Finance III BV intends to price three tranches of guaranteed notes (Baa1/BBB).

A five-year note is initially talked to price in the Treasuries plus 265 bps area, a 10-year issue is guided at the 280 bps spread area, and a 30-year tranche is talked to print in the 300 bps over Treasuries area.

In sovereign, supranational and agency supply expected Wednesday, the International Bank for Reconstruction and Development, or World Bank, plans to price a dollar-denominated offering of sustainable development bonds due April 22, 2025.

The notes (Aaa/AAA/AAA) were launched on Wednesday at mid-swaps plus 24 bps, tighter than initial talk in the mid-swaps plus 28 bps area.

Also, the Federal Home Loan Bank System is expected to price a new Global bond due April 14, 2025 on Wednesday.

More than $30 billion of high-grade corporate bonds have priced week to date, in line with the $25 billion to about $50 billion of issuance expected this week.

So far, deal volume has been led by a $9.5 billion five-part offering from Exxon Mobil Corp. on Monday.

Exxon Mobil’s notes (Aa1/AA) have tightened about 4 bps to 10 bps in the secondary market, a source said.

The company’s 2.992% notes due March 19, 2025 that were reopened on Monday are trading about 10 bps tighter.

Exxon Mobil priced a $1.25 billion add-on to the five-year notes at a spread of 140 bps over Treasuries.

The company first sold $1.5 billion of the notes on March 17 at par to yield a spread of 225 bps over Treasuries.

Overall secondary corporate volume ramped up to $30.75 billion on Tuesday from $20.88 billion on Monday, according to Trace data.

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