Morning Commentary: High-grade supply heavy; Phillips 66, Goldman, others shop notes

By Cristal Cody

Tupelo, Miss., Nov. 16 – More than 10 investment-grade issuers plan to tap the high-grade primary market on Monday, sources report.

Phillips 66 is marketing three tranches of guaranteed senior notes (A3/BBB+) that include floating-rate notes and two tranches of fixed-rate notes. The floaters will price at Libor plus a spread, while a tranche of fixed-rate notes due Feb. 15, 2024 is talked to print with a spread in the Treasuries plus 100 basis points area and a tranche of notes due Feb. 15, 2026 is talked at the 125 bps spread area.

Goldman Sachs Group Inc. plans to sell two tranches of three-year senior notes (A3/BBB+/A) that include floating-rate notes that will print at SOFR plus a spread and fixed-rate notes initially talked to price in the Treasuries plus 65 bps area.

Georgia-Pacific LLC is offering two tranches of notes (A3/A+) over the session. A tranche of notes due March 15, 2025 is talked to price at the Treasuries plus 50 bps area, while an offering of notes due May 15, 2026 is talked at the Treasuries plus 65 bps area.

Connecticut Light and Power Co., doing business as Eversource Energy, plans to price $400 million of five-year first and refunding mortgage bonds (A2/AA-/A+) on Monday. Initial price talk is in the Treasuries plus 50 bps area.

Arizona Public Service Co. plans to tap its 2.6% notes due Aug. 15, 2029 (A2/A-/A) that were first issued in a $300 million offering on Aug. 12, 2019 at 99.869 to yield 2.615%, or a Treasuries plus 98 bps spread. The company is offering a $105 million add-on guided at the Treasuries plus 90 bps to 95 bps area.

Other issuers expected over the day include Store Capital Corp., Rochester Gas & Electric Corp., Avolon Holdings Funding Ltd., Athene Global Funding, Guardian Life Global Funding and Assurant Inc.

Meanwhile, Kommunalbanken AS (Aaa/AAA) launched a $500 million offering of two-year sustainable notes at mid-swaps plus 3 bps on Monday.

In other market activity, BNG Bank NV (Aaa/AAA/AA+) plans to price a Rule 144A and Regulation S dollar-denominated offering of five-year sustainable notes.

Deal volume is expected to be strong this week as the last full week left in November with the Thanksgiving Day holiday next week, sources report.

About $25 billion to $30 billion of high-grade supply is forecast for the week.

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