Morning Commentary: Boeing, IBM, Anthem, Lam, Mondelez, Fifth Third among issuers

By Cristal Cody

Tupelo, Miss., April 30 – Several multiple-tranche bond deals are in the works to price over Thursday’s session from companies including Boeing Co., International Business Machines Corp., Anthem, Inc. and Lam Research Corp., sources said.

Boeing is marketing seven tranches of senior notes (Baa2/BBB-/BBB) that includes three-year notes with initial price talk at the Treasuries plus 500 basis points area.

The deal also includes five-, seven- and 10-year notes with initial talk in the 525 bps spread area, 20-year notes talked at the 515 bps spread area, 30-year notes talked at the 525 bps spread area and 40-year notes initially guided at the 550 bps over Treasuries area.

IBM plans to bring four tranches of notes (A2/A/A) to the primary market. A seven-year note is initially talked to print in the Treasuries plus 150 bps area, a 10-year issue is talked at the 165 bps spread area, 20-year notes are guided at the 190 bps spread area and a 30-year bond is talked to price at the 200 bps spread area.

Anthem plans to price two new tranches of senior notes (Baa2/A/BBB) due May 15, 2030 with initial talk at the Treasuries plus 210 bps area and notes due May 15, 2050 talked at the 230 bps spread area.

Anthem also plans to price an add-on to its 2.375% notes due Jan. 15, 2025 first issued in an $850 million offering on Sept. 9, 2019. The reopened notes have initial talk at the 175 bps over Treasuries area.

Lam Research is on deck with three tranches of senior notes (A3/A) that includes 10-year notes talked to print at the Treasuries plus 170 bps area, 30-year notes talked at the 200 bps spread area and 40-year notes guided at the 225 bps spread area.

Meanwhile, Mondelez International, Inc., which priced $1 billion of notes (Baa1/BBB) in two tranches on April 7, is returning to the high-grade bond market on Thursday.

The company plans to price a new five-year note talked at the Treasuries plus 160 bps area and an add-on to the 2.75% notes due April 13, 2030 priced earlier in April in a $500 million tranche at a Treasuries plus 212.5 bps spread. The add-on is talked to price at the Treasuries plus 170 bps area.

Fifth Third Bancorp also plans to price two tranches of senior notes (Baa1/BBB+/A-) during the session. The deal includes three-year notes with initial guidance in the Treasuries plus 180 bps area and seven-year notes talked at the Treasuries plus 240 bps area.

Also, several other issuers plan to tap the primary market on Thursday.

Barclays plc is offering six-year fixed-to-floating rate senior notes (Baa2/A) with initial price talk in the Treasuries plus 275 bps area.

Norfolk Southern Corp. intends to bring new 30-year senior notes (Baa1/BBB+) to the market. Initial guidance is in the 205 bps over Treasuries area.

NVR Inc. is offering $500 million of 10-year senior notes (Baa1/BBB+/BBB+) that are talked at the Treasuries plus 275 bps area.

In addition, Reliance Standard Life Global Funding II expects to price new five-year notes (A2/A+) during the session after holding fixed income investor calls on Wednesday. Initial price talk is in the Treasuries plus 265 bps area.

Deal volume week to date already totals more than $46 billion, compared to about $40 billion to $50 billion of issuance expected by market sources for the week.

In the secondary market, new issues are trading fairly tighter, a source said.

The $2 billion of senior notes (Baa3/BBB/BBB-) priced in three tranches from co-issuers NXP BV, NXP Funding LLC and NXP USA, Inc. in a Rule 144A and Regulation S offering on Wednesday tightened about 20 bps to 30 bps.

The company’s tranche of 3.4% green notes due May 1, 2030 firmed about 20 bps.

The issuers sold $1 billion of the 10-year notes at a spread of 280 bps over Treasuries versus initial talk in the Treasuries plus 335 bps area.

Overall high-grade secondary market volume totaled $29.67 billion on Wednesday, according to Trace data.

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