Morning Commentary: IADB, Rentenbank, Japan Finance, SEB, Pricoa, NatWest to price

By Cristal Cody

Tupelo, Miss., Aug. 25 – Strong sovereign, supranational and agency supply is expected in the high-grade bond market on Tuesday, along with corporate issuance, according to informed sources.

The Inter-American Development Bank (Aaa/AAA) launched a $2.5 billion offering of global notes due Nov. 15, 2023 at the start of the day on top of talk at mid-swaps plus 5 basis points.

Landwirtschaftliche Rentenbank (Aaa/AAA/AAA) launched a $1.5 billion registered offering of 10-year senior notes over the morning at mid-swaps plus 20 bps, tighter than talk in the mid-swaps plus 21 bps area.

Japan Finance Organization for Municipalities (A1/A+) launched a $1.5 billion Rule 144A and Regulation S offering of senior notes due Sept. 2, 2025 at mid-swaps plus 39 bps.

Initial price talk was in the mid-swaps plus 42 bps area.

Fannie Mae also announced plans to price new five-year Benchmark notes as early as Tuesday with settlement slated for Thursday.

Meanwhile, Skandinaviska Enskilda Banken AB plans to price three tranches of dollar-denominated senior notes (Aa2/A+/AA-) on Tuesday.

The deal includes three-year floating-rate notes that will price off the Libor benchmark, three-year fixed-rate notes initially talked to price in the Treasuries plus 60 bps area and five-year fixed-rate notes guided at the 80 bps over Treasuries area.

Equitable Holdings, Inc. subsidiary Equitable Financial Life Global Funding (A2/A+) intends to bring $300 million of seven-year funding agreement-backed notes to the primary market on Tuesday.

Initial price talk is in the Treasuries plus 110 bps area.

Pricoa Global Funding I is offering five-year funding agreement-backed notes (Aa3/AA-AA-) with price guidance in the Treasuries plus 65 bps area.

In addition, NatWest Markets plc is marketing registered fixed-to-fixed reset rate subordinated tier 2 notes due 2035 (Baa3/BBB+) talked to print in the Treasuries plus 260 bps area.

High-grade supply totaled more than $11 billion on Monday.

About $15 billion to $20 billion of high-grade deal volume is expected by market participants this week.

Energy issues firm

In the secondary market, new issues priced on Monday improved, a source said.

Entergy Corp.’s $800 million of 0.9% senior notes due Sept. 15, 2025 (Baa2/BBB) tightened about 4 bps.

The notes priced at a spread of Treasuries plus 70 bps.

Initial price talk was in the Treasuries plus 95 bps area.

Alabama Power Co.’s upsized $600 million of 1.45% senior notes due Sept. 15, 2030 (A1/A/A+) firmed to 83 bps bid.

The notes were sold at a spread of 85 bps over Treasuries, compared to initial talk at the 112.5 bps area.

Overall corporate investment-grade secondary market volume totaled $15.82 billion on Monday, according to Trace data.

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