Morning Commentary: Aon, Avery Dennison, British Telecommunications, BB&T offer notes

By Cristal Cody

Tupelo, Miss., Nov. 29 – Aon Corp., Avery Dennison Corp., British Telecommunications plc and BB&T Corp. are offering new issues in the investment-grade primary market on Thursday.

Aon intends to price fixed-rate guaranteed senior notes.

Avery Dennison plans a sale of fixed-rate senior notes.

British Telecommunications is marketing two tranches of fixed-rate senior notes.

BB&T is offering five-year fixed-rate series G senior medium-term notes.

Supply week to date at nearly $30 billion has surpassed syndicate forecasts of about $10 billion to $20 billion of issuance.

Deal volume was strong on Wednesday as credit spreads improved. JPMorgan Chase & Co. led the day’s issuance with a $5 billion two-part note issue.

Secondary trading also has been heavy this week. On Wednesday, $25.08 billion of bonds were traded, while $21.41 billion of issues traded on Tuesday and $21.38 billion of bonds traded on Monday, according to Trace.

In early trading on Thursday, Pacific Gas & Electric Co.’s senior notes edged up after plunging earlier in the month when the company’s power lines were linked to the deadly Camp Fire in California and its bonds downgraded.

PG&E improves

Pacific Gas & Electric’s 4.25% notes due Aug. 6, 2023 edged up to 92.25 early Thursday after closing the previous session at 92.13, a market source said.

The notes are climbing back after sinking to the 89 area from 99.51 on Nov. 15.

Pacific Gas & Electric (Baa2/BBB-/BBB-) sold $500 million of the notes on Aug. 2 at 99.76 to yield 4.3% and a spread of 145 basis points over Treasuries.

The company’s 4.65% notes due Aug. 6, 2028 traded at 89.75 early Thursday after showing little activity since before the Thanksgiving Day holiday.

The notes sank to the 84 area on Nov. 14 from where the issue traded in the 98.49 area earlier in the month.

In the Aug. 2 offering, $300 million of the 10-year notes were sold at 99.72 to yield 4.69% and a Treasuries plus 170 bps spread.

The electric and natural gas utility is based in San Francisco.

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