Morning Commentary: CIBC offers notes; Cigna deal looms; Carlyle markets offering

By Cristal Cody

Tupelo, Miss., Sept. 6 – After a steady torrent of deal announcements in the previous two sessions, market action slowed early Thursday with one reported deal in the works.

Canadian Imperial Bank of Commerce is offering dollar-denominated senior notes in fixed- and floating-rate tranches.

Additional primary action is expected over the session, and a massive transaction is looming from Cigna Corp., which has been holding fixed income investor calls and meetings since Tuesday, according to market sources.

Debt issuer Halfmoon Parent, Inc., which will become the parent of Cigna following its $67 billion cash, stock and debt acquisition of Express Scripts Holding Co., is expected to issue about $23.5 billion of senior notes to help finance the cash portion of the merger.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the arrangers.

Also on Thursday, the Carlyle Group (BBB+/BBB+) will wrap a two-day round of fixed income investor calls for a Rule 144A- and Regulation S-eligible offering of senior notes, according to a market source.

JPMorgan and Morgan Stanley are the arrangers.

High-grade supply has been heavy since the markets reopened in September following the Labor Day holiday with more than $30 billion of bonds priced on Tuesday and Wednesday. Volume has been led by Pfizer Inc.’s $5 billion six-tranche sale of senior notes on Tuesday and HSBC Holdings plc’s $5.25 billion of senior notes priced in three tranches on Wednesday.

The previous session, with nearly $21 billion of volume, was the “fourth busiest day of the year,” according to a BofA Merrill Lynch note released on Thursday.

The session also marked the busiest primary market activity since June 20 when $25 billion of high-grade bonds priced, the note said.

About $45 billion to $55 billion of issuance was forecast by market sources for the week.

In the secondary market, trading volume climbed to $16.95 billion on Wednesday from $13.38 billion on Tuesday, according to Trace data.

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