Morning Commentary: Target, Cades plan deals; Pacific Life starts roadshow; Target improves

By Cristal Cody

Tupelo, Miss., Oct. 16 – Deal action in the investment-grade bond market is expected to be strong over the week, while at least one issuer planning to tap the market on Monday.

Target Corp. is marketing 30-year notes during the session.

Also, Caisse d’Amortissment de la Dette Sociale, or Cades, is offering two-year dollar-denominated notes initially talked to price in the mid-swaps plus 6 basis points area. The benchmark Rule 144A and Regulation S deal is expected to price on Tuesday, according to a market source.

In other action on Monday, Pacific Life Insurance Co. intends to hold investor calls for a Rule 144A and Regulation S offering of 50-year fixed-to-floating rate surplus notes.

Coming up on Wednesday, the Federation des caisses Desjardins du Quebec (Aa2/A+/AA-) plans to kick off a three-day roadshow for a dollar-denominated Rule 144A and Regulation S notes offering.

About $25 billion to $30 billion of supply is forecasted for the week, a market source said.

The three-month Libor yield was down 1 bp early Monday to 1.35%.

In the secondary market, Target’s 3.625% notes due April 15, 2046 (A2/A/A-) improved to 95.71 early Monday from 95.50 on Friday, a market source said.

The Minneapolis-based retailer sold $1 billion of the bonds on April 4, 2016 at 99.42 to yield 3.657%, or a spread of Treasuries plus 72 bps.

Investment-grade secondary market volume totaled $13.82 billion on Friday, according to Trace.

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