Morning Commentary: Occidental Petroleum preps deal; Wabtec firms; Danone mostly unchanged

By Cristal Cody

Eureka Springs, Ark., Nov. 2 – Investment-grade pricing action in the bond market is expected to slow, with market attention focused on the Federal Reserve’s policy decision expected later on Wednesday and volatility up in the final days ahead of the U.S. presidential election.

At least one reported issuer is in the deal pipeline. Occidental Petroleum Corp. announced plans to price a two-tranche offering of senior notes.

Wabtec Corp.’s 3.45% senior notes due 2026 that priced on Monday traded about 5 basis points better in the secondary market.

Danone SA’s 2.947% notes due 2026 brought to market on Wednesday traded mostly wrapped around issuance.

The Markit CDX North American Investment Grade index improved about 1 bp at the start of the day to a spread of 79 bps.

The three-month Libor yield dropped 1 bp to 88 bps.

High-grade secondary market volume totaled $19.75 billion on Tuesday, up from $15.88 billion of bonds traded on Monday, according to Trace.

Wabtec improves

Wabtec’s 3.45% senior notes due 2026 were quoted trading at 157 bps offered, according to a market source.

Wabtec sold $750 million of the 10-year senior notes (Baa3/BBB) on Monday at a spread of 162.5 bps over Treasuries.

The Wilmerding, Pa.-based company provides value-added, technology-based products and services for rail and other industrial markets.

Danone mostly flat

Danone’s 2.947% notes due 2026 traded flat to 1 bp tighter at 114 bps offered in secondary trading, according to a market source.

The company sold $2 billion of the notes (Baa1/BBB+) on Wednesday at 115 bps over Treasuries.

Danone is a food products company based in Paris.

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