Morning Commentary: High-grade bond supply climbs ahead of Fed; Boeing, others on tap

By Cristal Cody

Tupelo, Miss., July 29 – Investment-grade bond issuers are expected to be active in the primary market on Monday with a number of deals marketed at the start of the day.

Boeing Co. is on deck with six tranches of fixed-rate senior notes.

Ford Motor Credit Co. LLC is offering two tranches of fixed-rate notes and one tranche of floating-rate notes.

Union Pacific Corp. plans to price two tranches of fixed-rate notes.

Owens Corning is marketing new fixed-rate senior notes.

Republic Services, Inc. plans to sell new fixed-rate notes.

Also, Essex Portfolio, LP announced an offering of fixed-rate guaranteed senior notes.

Supply is expected to be front-loaded this week ahead of the Federal Reserve’s monetary policy decision on Wednesday, according to market sources.

The Federal Open Market Committee begins its two-day meeting on Tuesday. Market sources widely expect a possible rate cut of about 25 basis points up to 50 bps.

Investment-grade bond supply is forecast to total in the $20 billion to $25 billion range with some market sources predicting $30 billion or more of volume this week.

A potential $10 billion to $15 billion investment-grade secured bond deal from T-Mobile U.S. Inc. is being eyed after the company received tentative approval from the Department of Justice, a source said.

On Friday, T-Mobile received federal antitrust approval, pending court approval of a divestiture settlement proposal, to acquire Sprint Corp.

T-Mobile held a roadshow in the United States and Europe in May via Barclays, Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC.

Investment-grade issuers priced more than $23 billion of bonds last week.

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