Morning Commentary: AerCap offers guaranteed notes; IADB talks five-year global notes

By Cristal Cody

Tupelo, Miss., Jan. 9 – AerCap Ireland Capital DAC and co-issuer AerCap Global Aviation Trust announced plans early Wednesday to tap the investment-grade dollar-denominated bond market.

The offering includes two tranches of fixed-rate guaranteed notes that are registered with the Securities and Exchange Commission.

Also, the Inter-American Development Bank intends to bring a deal to the primary market on Wednesday. The lender plans to price a dollar-denominated offering of five-year global notes that was initially talked to price in the mid-swaps plus 11 basis points area.

Fannie Mae also is expected to price new three-year Benchmark notes during the session.

While volume was light in the first week of the year with more than $11 billion of bonds priced, issuance has been strong in the second week.

Week to date, high-grade corporate issuers have priced nearly $18 billion of bonds, including $14 billion of issuance on Tuesday.

Issuers such as Marsh & McLennan Cos., Inc., Energy Transfer Operating LP, MidAmerican Energy Co. and Kroger Co. brought $1 billion-plus deals to the primary market in the first two sessions.

The week is expected to post $25 billion to $30 billion of overall supply, according to market sources.

So far, the financial markets are mostly ignoring the U.S. federal government’s shutdown, a source said.

PG&E mostly soft

Volume in the secondary market also has been busy so far in the week. On Tuesday, $21.81 billion of high-grade bonds traded, up from $20.98 billion on Monday, according to Trace.

Pacific Gas & Electric Co.’s senior notes (Baa2/BB-/BBB-) have been mixed but mostly softer following the downgrade to junk by S&P Global Ratings on Monday, a source said.

The San Francisco electric and natural gas utility’s 4.25% notes due Aug. 6, 2023 traded over the morning in the 85.63 area after ending 2018 in the 93 area.

The notes have softened since trading at 99.51 in mid-November before the company’s power lines were allegedly linked to the deadly California Camp Fire.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.