Credit spreads improve as supply wanes; JPMorgan firms; Eversource Energy notes tighten

By Cristal Cody

Tupelo, Miss., Dec. 12 – Investment-grade issuance looks wrapped up for the year with no reported issuers in the primary market on Wednesday.

Volume for the month was initially expected to reach about $25 billion to $30 billion, but syndicate sources now expect little, if any, other issuance this year with more than $5 billion of bonds priced month to date.

High-grade issuers sold $1.2 billion of bonds on Monday following more than $4 billion of supply last week.

Syndicate sources expected anywhere from zero issuance to about $5 billion of deal volume for the week.

Market tone has improved with credit spreads about 4 basis points tighter over the past two sessions.

The Markit CDX North American Investment Grade 31 index closed on Wednesday about 2 bps better at a spread of 78 bps.

High-grade bonds were mostly unchanged to modestly stronger in the secondary market.

JPMorgan Chase & Co.’s 4.452% fixed-to-floating rate notes due Dec. 5, 2029 traded about 1 bp tighter on the day.

Home Depot Inc.’s senior notes (A2/A) were mostly unchanged on Wednesday.

Pacific Gas & Electric Co.’s senior notes (Baa2/BBB-/BBB-) improved slightly during the session but remain soft since the company’s power lines were linked to the California Camp Fire and its bonds downgraded in November.

Earlier, Eversource Energy’s $900 million of senior notes (Baa1/A/BBB+) that priced on Monday were quoted about 8 bps tighter in secondary trading, according to a market source.

The company’s 3.8% notes due Dec. 1, 2023, which priced in a $400 million tranche at 99.638 to yield 3.881%, or a spread of 117 bps over Treasuries, tightened to the 108 bps area.

Eversource Energy’s 4.25% notes due April 1, 2029 also improved to the 139 bps area.

The Boston-based energy delivery company sold $500 million of the notes at 99.305 to yield 4.335% and a spread of Treasuries plus 147 bps.

JPMorgan modestly better

JPMorgan Chase’s 4.452% fixed-to-floating-rate notes due Dec. 5, 2029 tightened about 1 bp to 147 bps bid, a market source said.

The company (A2/A-/AA-) sold $2.5 billion of the notes on Nov. 28 at a spread of Treasuries plus 140 bps.

The issue has a 4.452% coupon until Dec. 5, 2028 and then coverts to a rate equal to Libor plus 133 bps.

JPMorgan Chase is a financial services company based in New York City.

Home Depot steady

Home Depot’s 3.9% senior notes due 2028 (A2/A) were unchanged in secondary trading on Wednesday at 90 bps bid, according to a market source.

The company sold $1 billion of the notes on Nov. 27 at a spread of Treasuries plus 93 bps.

Home Depot is an Atlanta-based home improvement retailer.

PG&E improves

Pacific Gas & Electric’s 4.25% notes due Aug. 6, 2023 headed out slightly better in the secondary market at 93.5 bid from 92.88 on Tuesday, a source said.

The issue has improved since softening to the 89 area from 99.51 on Nov. 15.

Pacific Gas & Electric sold $500 million of the notes on Aug. 2 at 99.76 to yield 4.3% and a spread of 145 bps over Treasuries.

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

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