Morning Commentary: High-grade supply ramps up; Alphabet, AstraZeneca, Praxair, DTE eyed

By Cristal Cody

Tupelo, Miss., Aug. 3 – Investment-grade issuers poured into the primary market early Monday to kick off an expected busy week of supply, sources report.

Google owner Alphabet Inc. is on deck with six tranches of senior notes (Aa2/AA+), including three tranches of sustainability notes.

The deal features seven-year notes with initial price talk in the Treasuries plus 55 basis points area, 20-year notes talked at the 90 bps to 95 bps area and 40-year notes talked at the 125 bps to 130 bps area.

The sustainability bonds include five-year notes talked to print in the Treasuries plus 40 bps area, 10-year notes talked at the 75 bps area and 30-year notes talked at the 105 bps to 110 bps area.

AstraZeneca plc is offering three tranches of registered notes (A3/BBB+/A-) due in 2026, 2030 and 2050.

The 2026 notes are talked to price with a spread in the 80 bps over Treasuries area, while the 2030 notes are talked at the 110 bps area and the 2050 notes are talked at the 135 bps area.

Praxair, Inc. also plans to price two tranches of 10- and 30-year notes (A2/A) on Monday. Initial price guidance on the 10-year notes is at the Treasuries plus 85 bps area. The 30-year tranche is guided to price at the 110 bps over Treasuries area.

JetBlue Airways Corp. announced it plans to price $635,462,000 of class A pass-through trust certificates (A2/A) and $172.33 million of class B pass-through trust certificates (Baa2/BBB).

The class A certificates have a final distribution date of Nov. 15, 2032 and are talked to print at the 4.5% area.

The class B certificates have a final distribution date of Nov. 15, 2028. Initial price guidance is at the 8% area.

In other supply expected, Mid-America Apartments, LP intends to price $400 million of fixed-rate senior notes due 2031 (Baa1/BBB+/BBB+) following a virtual roadshow and fixed income investor calls held Friday. Initial price guidance is at the 150 bps over Treasuries area.

Meanwhile, Kilroy Realty, LP is offering green senior notes due Nov. 15, 2032 (Baa2/BBB) that are guaranteed by general partner Kilroy Realty Corp. The notes are talked to price at the 240 bps spread area.

Spirit Realty Capital, Inc.’s operating partnership, Spirit Realty, LP, also is offering $400 million of new fixed-rate notes due 2031 (Baa3/BBB/BBB-) that are talked to print at the 300 bps over Treasuries area.

Textron Inc. is marketing $500 million of registered fixed-rate notes due 2031 (Baa2/BBB) on Monday. Initial price guidance is in the Treasuries plus 230 bps area.

DTE Energy Co. intends to bring $500 million of five-year senior notes (Baa2/BBB/BBB) to the primary market. Price guidance is in the Treasuries plus 120 bps area.

Also, Huntington Bancshares Inc. expects to price $350 million of perpetual preferred shares (Baa3/BB+) during the session. Initial price talk is the 4.75% to 4.875% area.

Market sources are anticipating about $25 billion to $35 billion or more of issuance this week.

August overall is expected to post about $60 billion to $70 billion of high-grade volume.

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