Morning Commentary: UnitedHealth to price four tranches of notes; PG&E slightly better

By Cristal Cody

Tupelo, Miss., Dec. 13 – UnitedHealth Group Inc. is on deck on Thursday with a four-tranche offering of fixed-rate notes.

UnitedHealth (A3/A+/A) was last in the high-grade primary market on June 14 with a $4 billion five-part bond deal.

Week to date, $1.2 billion of investment-grade bonds have priced, in line with syndicate forecasts of no supply to about $5 billion of deal volume for the week.

UnitedHealth’s existing bonds ended Wednesday mostly unchanged in the secondary market, a source said.

Secondary volume has been heavy this week. On Wednesday, $25 billion of high-grade bonds were traded, compared to $25.01 billion on Tuesday and $18.97 billion on Monday, according to Trace data.

In other secondary trading, Pacific Gas & Electric Co.’s senior notes (Baa2/BBB-/BBB-) opened modestly better, according to a market source.

Pacific Gas & Electric’s 4.25% notes due Aug. 6, 2023 were at 93.63 over the morning in light trading. The notes went out on Wednesday at 93.5 bid.

The notes have recovered slightly since weakening to the 89 area from 99.51 on Nov. 15 after the company’s power lines were linked to the California Camp Fire and its bonds downgraded last month.

Pacific Gas & Electric 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 electric and natural gas utility is based in San Francisco.

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