Morning Commentary: Westpac, Owens Corning in deal pipeline; bonds mixed in secondary market

By Cristal Cody

Tupelo, Miss., June 21 – At least two companies plan to tap the investment-grade primary market on Wednesday with bond offerings.

Westpac Banking Corp. is marketing fixed- and floating-rate notes in a two-tranche deal.

Owens Corning is offering senior notes.

Market sources expect about $25 billion of supply for the week.

The three-month Libor yield was up 1 basis point to 1.28% on Wednesday, according to a market source.

Westpac Banking’s existing notes (Aa2/AA-) were mixed in early secondary trading. The company’s 3.35% notes due March 8, 2027 opened about a dime weaker at 101.41, a source said.

The Sydney-based bank and financial services provider sold $1 billion of the 10-year notes on Feb. 27 at 99.915 to yield 3.36%, or 100 bps over Treasuries.

Westpac Banking’s 2.15% notes due March 6, 2020 were flat at 100.24 over the morning. The notes priced in a $1.65 billion tranche in the Feb. 27 offering at 99.957 to yield 2.165%, or 72 bps over Treasuries.

In other secondary trading, Owens Corning’s 3.4% notes due Aug. 15, 2026 (Ba1/BBB/BBB-) were modestly better at 99.76 early Wednesday from where the notes went out in the previous session at 99.66, a source said.

The Toledo, Ohio-based maker of composite building materials sold $400 million of the notes on Aug. 3, 2016 at 99.587 to yield 3.449%, or a spread of Treasuries plus 190 bps.

Overall secondary trading volume rose to $18.55 billion on Tuesday from $12.99 billion on Monday, according to Trace.

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