Morning Commentary: High-grade primary packed; Visa, Fox, energy issuers, others on deck

By Cristal Cody

Tupelo, Miss., March 31 – Investment-grade bond issuers continue to pour into the primary market with heavy supply expected over Tuesday’s session, sources report.

Both corporate and sovereign, supranational and agency issuance is slated for Tuesday.

Visa Inc. is offering three tranches of senior notes that includes seven- and 10-year notes initially talked at the Treasuries plus 190 basis points area and 20-year notes talked at the 185 bps spread area.

Fox Corp. is returning to the primary market with two tranches of five- and 10-year notes. Both tranches are talked to price at the Treasuries plus 337.5 bps area.

Crown Castle International Corp. also is marketing two tranches of senior notes on Tuesday. The company plans to price 10-year notes with initial talk at the 350 bps spread area and 30-year notes talked at the Treasuries plus 362.5 bps area.

A few utilities also are offering bonds during the session.

San Diego Gas & Electric Co. plans to price $400 million of 30-year first mortgage bonds that are initially guided to print with a spread in the Treasuries plus 250 bps area.

Dominion Energy, Inc. is on deck with 10-year senior notes. The issue is talked to price at the Treasuries plus 337.5 bps area.

Edison International is offering $400 million of five-year senior notes that are talked at the Treasuries plus 650 bps area.

DTE Electric Co. intends to sell $600 million of 11-year general and refunding mortgage bonds with initial talk in the 235 bps spread area.

Ameren Illinois Co. is marketing $500 million of first mortgage bonds due Jan. 15, 2031 that are talked to print at the 350 bps spread area.

In addition, Idaho Power Co. expects to reopen its 4.2% first mortgage bonds due March 1, 2048 that were first sold on March 13, 2018. The add-on is talked to price Tuesday at the Treasuries plus 230 bps area.

In other supply expected over the day, General Mills, Inc. is offering $500 million of 10-year senior notes with initial talk in the Treasuries plus 275 bps area.

Ameriprise Financial, Inc. plans to sell $500 million of five-year senior notes. Initial talk is in the 312.5 bps over Treasuries area.

Athene Global Funding also is in the day’s deal pipeline with an offering of 10-year senior notes that are talked to price at the Treasuries plus 550 bps area.

In SSA supply, Swedish Export Credit Corp. plans to price three-year global notes. Initial price talk was in the mid-swaps plus 45 bps area with guidance tightened 5 bps to mid-swaps plus 40 bps.

About $30 billion to as much as $60 billion of deal volume was expected this week, according to market sources.

Issuers priced more than $37 billion of bonds on Monday, led by a $20 billion six-part deal from Oracle Corp.

Secondary market volume also was heavy on Monday with $26.56 billion of high-grade bonds traded, according to Trace data.

Last week saw record corporate investment-grade deal volume in the primary market that totaled over $109 billion on the heels of Federal Reserve and U.S. government measures to combat economic fallout from the coronavirus as non-essential businesses are closed across the country.

Lighter pricing action is anticipated over the back half of the week and in April as companies enter earnings reporting-related blackout periods, according to market sources.

Over the morning, market tone was mostly positive.

Stocks were all improved. The Nasdaq rose 1.12% in early trading.

The iShares iBoxx Investment Grade Corporate Bond ETF improved 0.49% at the start of the day.

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