Morning Commentary: Novartis, Sysco, DTE, Oshkosh, Duke on tap; Carrier holds deal calls

By Cristal Cody

Tupelo, Miss., Feb. 11 – Tuesday’s session started off busy with several high-grade issuers marketing bonds and others in the deal pipeline, according to market sources.

Novartis Capital Corp. is offering notes due Feb. 14, 2025, Feb. 14, 2027, Aug. 14, 2030 and Aug. 14, 2050 (A1/AA-/AA-) that are guaranteed by guaranteed by Novartis AG.

Initial price talk on the five-year notes is in the Treasuries plus 55 basis points area, while the seven-year tranche is talked to price in the 65 bps spread area.

Novartis’ 10-year notes are initially talked to print with a spread in the Treasuries plus 80 bps area.

Initial price talk on the 30-year notes is in the Treasuries plus high 90 bps area.

Sysco Corp. plans to bring a $1 billion two-part offering of fixed-rate senior notes (A3/BBB+) to the market on Tuesday.

A $500 million tranche of green notes due Feb. 15, 2030 is talked to price in the Treasuries plus 105 bps area.

Price guidance on a $500 million tranche of notes due Feb. 15, 2050 is in the Treasuries plus 145 bps to 150 bps area.

DTE Electric Co. (Aa3/A/A+) offered $1.1 billion of general and refunding mortgage bonds due March 1, 2030 and March 1, 2050 at the start of the day.

The $550 million of 10-year bonds are talked to price Tuesday with a spread in the 85 bps over Treasuries area, and the $550 million of 30-year bonds are guided to print in the 110 bps over Treasuries area.

Oshkosh Corp. intends to sell $300 million of senior notes due March 1, 2030 (Baa3/BBB/BBB-) that are initially talked to price with a spread in the Treasuries plus 185 bps area.

Also, Duke Realty LP is marketing $300 million of senior notes due March 1, 2050 (Baa1/BBB+) during the session. Initial price talk is in the Treasuries plus 140 bps area.

Meanwhile on Tuesday, Carrier Global Corp. kicks off a two-day round of fixed income investor calls for a potential $9.2 billion offering of senior notes (Baa3/BBB) as part of its spinoff from United Technologies Corp.

Otis Worldwide Corp., which also is being spun off from United Technologies, is expected to follow with fixed income investor calls for a possible $5.3 billion offering of senior notes (Baa2/BBB).

High-grade deal volume on Monday totaled more than $10 billion and included new issuance from Bank of America Corp., Toyota Motor Credit Corp., Intel Corp. and AvalonBay Communities, Inc.

About $25 billion to $35 billion of supply is anticipated this week, according to syndicate sources.

In the secondary market, new issues priced Monday traded about 1 bp to 3 bps tighter than issuance, a source said.

Intel’s $2.25 billion of senior notes (A1/A+/A+) sold in three new and reopened tranches on Monday improved about 1 bp to 2 bps.

The company’s $1 billion of new issue 3.1% notes due Feb. 15, 2060, which priced at a Treasuries plus 110 bps spread, firmed 2 bps.

Overall secondary market volume totaled $17.87 billion on Monday, according to Trace data.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.