Lowe’s, Smith & Nephew, Conagra, Steel Dynamics, Omega price; supply beats forecasts

By Cristal Cody

Tupelo, Miss., Oct. 7 – Investment-grade-rated companies priced more than $7 billion of bonds in the primary market on Wednesday, pushing week-to-date volume past market forecasts.

Lowe's Cos., Inc. brought $4 billion of notes (Baa1/BBB+/) in three tranches to the market.

The company sold $1 billion of long seven-year notes, $1.25 billion of 10-year notes and $1.75 billion of 30-year bonds.

Smith & Nephew plc priced $1 billion of 10-year notes (Baa2/BBB+/) during the session.

Conagra Brands, Inc. sold $1 billion of seven-year senior notes (Baa3/BBB-/BBB-) on Wednesday.

Steel Dynamics, Inc. priced $750 million of fixed-rate senior notes (Baa3/BBB-/BBB) in two tranches, including $350 million of seven-year notes and $400 million of 30-year notes.

Also, Omega Healthcare Investors, Inc. brought $700 million of senior notes due Feb. 1, 2031 (Baa3/BBB-/BBB-) on Wednesday.

In sovereign, supranational and agency pricing action, the European Bank for Reconstruction and Development (Aaa/AAA/AAA) priced $1 billion of floating-rate notes due Oct. 15, 2024.

Investment-grade issuers have sold more than $23 billion of corporate and SSA bonds week to date.

About $15 billion to $20 billion of high-grade supply was anticipated by market participants this week.

The primary market is expected to remain active with several companies holding fixed income investor calls for possible bond deals this week, sources said.

Market tone was mostly improved with stock indices recovering more than 1.7% over the day on reports of possible additional Covid-19 stimulus funding and following the release of the Federal Reserve’s minutes from its September policy meeting.

The iShares iBoxx Investment Grade Corporate Bond ETF rose 0.03% to 134.29, while the PIMCO Investment Grade Corporate Bond index softened 0.14% to 114.44.

Credit spreads came in more than 2 basis points over the day.

The Markit CDX North American Investment Grade 35 index firmed 2.25 bps to a spread of 55.94 bps.

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