Morning Commentary: Altria offers dollar notes; PNC, Bank of England, BNG on deck

By Cristal Cody

Tupelo, Miss., Feb. 12 – Altria Group Inc. is set to tap the dollar-denominated market on Tuesday a day after bringing a €4.25 billion four-part offering of reverse Yankee bonds.

Altria is marketing six tranches of dollar-denominated notes that are guaranteed by Philip Morris USA Inc.

The company on Monday priced four- to 12-year maturities in the euro-denominated deal because the European credit market trends toward shorter maturities, which will leave the U.S. dollar deal “skewed toward longer maturities,” according to a BofA Merrill Lynch research report released Tuesday.

In other supply expected on Tuesday, PNC Financial Services Group, Inc. plans to price a reopening of its 3.5% senior notes due Jan. 23, 2024. The issue first priced in a $750 million offering on Jan. 17 at 99.773 to yield 3.55%, or a spread of 100 basis points over Treasuries.

Also on Tuesday, Bank of England intends to price a $2 billion offering of three-year notes that were initially talked to price in the mid-swaps plus 5 bps area.

In addition, BNG Bank NV plans a $250 million tap of its senior floating-rate notes due March 11, 2022 on Tuesday. The notes were initially talked to price with a yield in the Libor plus 5 bps area.

BNG Bank originally sold $500 million of the notes on April 5, 2018 at Libor plus 7 bps.

Investment-grade volume was heavy on Monday with more than $10 billion of bonds priced from issuers including Union Pacific Corp., Total Capital International and Mondelez International, Inc.

Syndicate sources predict about $25 billion to $30 billion of supply this week.

In the secondary market, $18.94 billion of high-grade corporate bonds traded on Monday, according to Trace data.

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