Morning Commentary: High-grade supply continues; ViacomCBS, Toyota, IADB on deck

By Cristal Cody

Tupelo, Miss., March 27 – High-grade corporate and sovereign, supranational and agency issuance is expected over Friday’s session, continuing a streak of heavy weekly volume that already tops $98 billion, sources said.

ViacomCBS Inc. is bringing tranches of five-year notes and long 10-year notes to the primary market. Both tranches are initially talked to print in the Treasuries plus 260 basis points area.

Toyota Motor Credit Corp. is offering three tranches of fixed-rate notes due 2023, 2025 and 2027. The three- and seven-year notes are initially talked to price at the Treasuries plus 280 bps area, while the 10-year issue is talked at the 290 bps spread area.

Omnicom Group Inc. is offering $500 million of long 10-year senior notes with initial talk in the low 400 bps over Treasuries area.

Xcel Energy Inc. also is marketing $500 million of 10-year senior notes with initial guidance in the Treasuries plus 312.5 bps area.

Ecolab Inc. intends to price a $200 million add-on to its 4.8% senior notes due March 24, 2030 that first priced a week ago at a spread of 387.5 bps over Treasuries. The add-on is talked at the Treasuries plus 325 bps area.

Meanwhile, additional financial supply is expected on Friday following heavy volume on Thursday.

Credit Suisse Group AG is offering 11-year senior notes with initial talk in the Treasuries plus 387.5 bps area.

In SSA deal activity, the Inter-American Development Bank launched a $2 billion offering of five-year notes on Friday at mid-swaps plus 37 bps.

Toronto-Dominion Bank also launched a $1.25 billion offering of three-year covered bonds at mid-swaps plus 100 bps on Friday.

Market tone was risk-off with stocks and high-grade corporate bond exchange-traded funds down over the morning, while Treasuries mostly improved.

The S&P 500 index declined 3.25% and the Dow Jones industrial average was down 3.76% in early trading.

The iShares iBoxx Investment Grade Corporate Bond ETF was off 0.6% at the start of the day.

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