Morning Commentary: PNC Financial, Dexia, Canada on tap; Fox, Wells Fargo notes firm

By Cristal Cody

Tupelo, Miss., Jan. 17 – Corporate and sovereign, supranational and agency issuers are expected to tap the high-grade primary market on Thursday.

PNC Financial Services Group, Inc. is offering five-year senior notes.

Other bank and financial issuers in the primary market this week have included Wells Fargo & Co., J.P. Morgan Chase & Co. and Citibank, NA.

On Thursday, Brussels, Belgium-based regional bank Dexia Credit Local SA intends to price a dollar-denominated Rule 144A and Regulation S offering of three-year senior notes. Initial price talk was in the mid-swaps plus 25 basis points area.

Also in the SSA space on Thursday, Canada plans to price U.S. dollar-denominated three-year global notes that are registered with the Securities and Exchange Commission.

The notes due Jan. 25, 2022 were initially talked to print with a spread in the Treasuries plus 12 bps area.

Canada’s deal follows the Province of Alberta’s $1.75 billion of five-year global bonds that priced on Tuesday.

Investment-grade issuers have sold more than $29 billion of bonds, including more than $21 billion of corporate notes, week to date.

New issues are trading mostly tighter in the secondary market, sources report.

Fox Corp.’s $6.8 billion five-part offering of notes (Baa2/BBB) that priced on Tuesday has tightened more than 10 bps across all five tranches.

The company’s 4.709% notes due Jan. 25, 2029 were quoted 14 bps tighter at 180 bps and trading more than a point higher in price in the 101 area, sources said.

Fox sold $2 billion of the bonds at par to yield 200 bps over Treasuries.

Wells Fargo’s $5.5 billion of medium-term notes (A2/A-/A+) that priced in two tranches of 3.75% notes due Jan. 24, 2024 and 4.15% notes due Jan. 24, 2029 on Wednesday tightened about 5 bps in the secondary market, a source said.

The secondary market has remained active this week with $23.86 billion of investment-grade bonds traded on Wednesday, up from $23.14 billion on Tuesday and $18.03 billion on Monday, according to Trace.

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