Pfizer, Equinor, energy issuers tap primary; SSA supply on deck; credit spreads tighten

By Cristal Cody

Tupelo, Miss., May 18 – Investment-grade volume came to more than $12 billion on Monday, led by Pfizer Inc.’s $4 billion offering of senior notes (A1/AA-/A+) sold in four parts.

Intercontinental Exchange Inc. brought $2.5 billion of senior notes (A2/A/) in two tranches to the primary market.

Equinor ASA (Aa2/AA-/) priced $1.5 billion of guaranteed notes in two tranches.

Alcon Finance Corp. came by with $750 million of 10-year senior notes.

RELX Capital Inc. sold $750 million of 10-year guaranteed senior notes.

Unum Group priced $500 million of five-year senior notes (Baa3/BBB/BBB-) following fixed income investor calls held last week.

Energy issuance was strong during the session.

Diamondback Energy, Inc. priced $500 million of five-year split-rated senior notes (Ba1/BBB-/BBB).

Evergy Metro, Inc. sold $400 million of 10-year mortgage bonds (A2/A+/).

Piedmont Natural Gas Co., Inc. placed $400 million of 30-year senior notes.

Duke Energy Ohio, Inc. priced $400 million of 10-year first mortgage bonds (A2/A/).

Also, Northern States Power Co. sold $100 million of first mortgage bonds due May 1, 2051 (Aa3/A/A+) on Monday.

Meanwhile, Brighthouse Financial Inc. priced an upsized $350 million of $25-par perpetual series B non-cumulative preferred stock (Ba2/BBB-/BB+) during the session.

In other activity on Monday, Banco Santander, SA (Baa1/A-/A-) began a two-day round of fixed income investor calls for a dollar-denominated offering of senior notes.

Looking ahead to Tuesday, sovereign, supranational and agency supply is on tap.

Landwirtschaftliche Rentenbank (Aaa/AAA/AAA) plans to price a registered dollar-denominated offering of five-year fixed-rate senior notes with initial price talk at the mid-swaps plus 24 basis points area.

The Kingdom of Belgium (Aa3/AA/AA) is marketing $1 billion of 10-year notes at the mid-swaps plus 37 bps area.

In addition, the Province of Quebec (Aa2/AA-/AA-) intends to price $1 billion of 10-year global notes that are talked to price at the mid-swaps plus 68 bps area.

About $30 billion to $40 billion of deal volume is anticipated by market participants this week.

Investment-grade issuance is expected to be front-loaded with volume thinning by Thursday ahead of the early market close on Friday and Memorial Day holiday on May 25, sources said.

After record volume in March and April and heavy supply month to date, BofA Securities Inc. analysts expect “more normal issuance activity in June” of about $100 billion to $120 billion, according to a report released Monday.

High-grade issuers have raised approximately $350 billion of new cash since March from loans and bond issuance.

Companies are expected to be “increasingly confident spending from the war chest instead of issuing,” according to the report.

High-grade bond volume of just $200 billion to $300 billion is now expected in the second half of the year, the analysts said.

The Markit CDX North American Investment Grade 33 index tightened nearly 6 bps on the day to a spread of 89.87 bps.

© 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.