Morning Commentary: Otis, Omnicom, Halliburton, BP, Tennessee Gas, KLA, UDR on tap

By Cristal Cody

Tupelo, Miss., Feb. 19 – High-grade supply is set to remain heavy over Wednesday’s session, market sources report.

Otis Worldwide Corp. is offering six tranches of senior notes following fixed income investor calls on Tuesday.

The deal includes three-year floaters with initial price talk at the Libor plus 65 basis points area, five-year notes talked to price at the Treasuries plus 85 bps area, a seven-year tranche talked at the 95 bps spread area, 10-year notes talked to print at the Treasuries plus 115 bps area, a 20-year issue talked in the 135 bps over Treasuries area and 30-year notes talked to price at the Treasuries plus 155 bps area.

Omnicom Group Inc. expects to tap the primary market on Wednesday with dollar-denominated 10-year senior notes following fixed income investor calls held on Tuesday.

Initial price guidance on the notes is in the Treasuries plus 110 bps to 115 bps area.

Halliburton Co. is marketing 10-year senior notes with initial price talk in the Treasuries plus 150 bps area.

F.N.B. Corp. plans to bring $300 million of three-year senior notes to the primary market. The notes are talked to print at the 105 bps over Treasuries spread area.

BP Capital Markets America Inc. is marketing dollar-denominated notes due Feb. 24, 2050 on Wednesday.

Initial price talk is in the Treasuries plus 120 bps to 125 bps area.

Tennessee Gas Pipeline Co., LLC plans to price 10-year senior notes during the session.

The notes due March 1, 2030 are initially talked to price in the Treasuries plus 155 bps area.

KLA Corp. expects to sell 30-year senior notes over the day. The notes are talked to price at the Treasuries plus 155 bps area.

In addition, UDR, Inc. intends to price a $200 million add-on to its 3.2% guaranteed medium-term notes due Jan. 15, 2030 that were issued on July 2, 2019 and first reopened on Oct. 11, 2019. The notes are talked to price at the Treasuries plus 110 bps area.

About $25 billion to as much as $40 billion of bond supply is expected by market sources this week.

Deal volume was strong on Tuesday following Monday’s market holiday with more than $19 billion of investment-grade issuance, led by Amgen Inc.’s $5 billion five-tranche offering of senior notes.

In the secondary market, new issues were quoted flat to about 4 bps tighter.

Commonwealth Edison Co.’s $1 billion of first mortgage bonds (A1/A/A) that priced in two tranches on Tuesday were wrapped around issuance to about 1 bp tighter on the long end.

The unit of Chicago-based energy provider Exelon Corp. sold $350 million of 2.2% first mortgage bonds due March 1, 2030 at a spread of 68 bps over Treasuries and $650 million of 3% 30-year bonds at a Treasuries plus 100 bps spread.

The 10-year bonds were talked to price in the 85 bps spread area, while the 30-year tranche was initially talked to print at the Treasuries plus 115 bps area.

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