Morning Commentary: Amazon.com, American Tower, Ralph Lauren, PECO pack primary

By Cristal Cody

Tupelo, Miss., June 1 – Deal volume kicked off in high gear on Monday with nearly a dozen issuers, including Amazon.com Inc., offering investment-grade bonds, sources report.

Amazon.com (A2/A+) plans to tap the primary market with a six-tranche offering of notes.

A tranche of three-year notes is initially talked to price with a spread in the Treasuries plus 40 basis points area, while a five-year note is talked at the 65 bps spread area and a seven-year tranche is talked at the 85 bps over Treasuries area.

The deal includes 10-year notes with initial talk in the Treasuries plus 105 bps area, 30-year notes talked to print at the 130 bps spread area and 40-year notes talked to price in the 150 bps spread area.

American Tower Corp. intends to sell three tranches of senior notes (Baa3/BBB-/BBB+) during the session.

The company is offering five-year notes talked at the 135 bps spread area, 10-year notes talked at the 185 bps area and 30-year notes guided to print at the Treasuries plus 200 bps area.

In other primary action on Monday, Ralph Lauren Corp. is offering two tranches of senior notes (A2/A-) after completing fixed income investor calls on Friday.

Ralph Lauren expects to price two-year notes talked at the Treasuries plus 225 bps area and 10-year notes initially guided at the 300 bps spread area.

John Deere Capital Corp. is marketing two tranches of senior medium-term notes (A2/A/A) on Monday.

A tranche of notes due July 5, 2022 is talked to price at a spread of 70 bps over Treasuries, while a tranche of notes due July 5, 2023 has initial talk in the Treasuries plus 85 bps area.

In energy supply expected during the session, Southwest Gas Corp. is offering 10-year senior notes (A3/A-) with initial price guidance in the 195 bps over Treasuries area.

Also, PECO Energy Co. is marketing 30-year first and refunding mortgage bonds (Aa3/A/A+) that are talked to price at the Treasuries plus 155 bps area.

Other supply on Monday is expected to include offerings from Paccar Financial Corp., Ally Financial Inc., WestRock Co. subsidiary WRKCo Inc., Metropolitan Life Global Funding I and Agilent Technologies, Inc.

Paccar (A1/A+) plans to sell new three-year medium-term notes that are talked at the 100 bps over Treasuries area.

Ally Financial is marketing three-year senior notes (Ba1/BBB-/BBB-) with initial guidance in the Treasuries plus 337.5 bps spread area.

WRKCo is offering $500 million of guaranteed senior notes due Jun 15, 2033 (Baa2/BBB) with initial price talk at the Treasuries plus 275 bps area.

Metropolitan Life Global Funding I expects to bring three-year notes (Aa3/AA-) that are talked to print at the Treasuries plus 95 bps area.

Agilent Technologies is marketing 10-year notes (BBB+/BBB+) with initial price talk at the Treasuries plus 170 bps area.

About $30 billion to as much as $50 billion of volume is expected in the high-grade primary market this week, while market participants forecast June to post about $100 billion to $125 billion of total issuance for the month.

More than $33 billion of high-grade issues priced last week, beating market forecasts of about $25 billion to $30 billion of volume.

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