Morning Commentary: Two high-grade issuers plan primary market tap; Danone softens; CDX firms

By Cristal Cody

Eureka Springs, Ark., Nov. 3 – While much attention early Thursday centered on the Chicago Cubs’ World Series curse-breaking victory, the investment-grade primary market showed signs of activity for the day.

Principal Financial Group, Inc. plans to price an offering of 10- and 30-year senior notes.

Also, Public Service Enterprise Group Inc. intends to bring three- and five-year notes to market.

Bonds were mixed in secondary trading.

Danone SA’s 2.947% notes due 2026 that priced in the previous week softened about 2 basis points from where the bonds were quoted on Wednesday.

The Markit CDX North American Investment Grade index opened about 1 bp tighter at a spread of 79 bps.

The three-month Libor yield was unchanged early Thursday at 88 bps.

On Wednesday, $17.5 billion of investment-grade issues were traded, compared to $19.75 billion on Tuesday and $15.88 billion on Monday, according to Trace.

Danone eases

Danone’s 2.947% notes due 2026 softened about 2 bps from the previous session to 116 bps offered, according to a market source early Thursday.

The company sold $2 billion of the notes (Baa1/BBB+) on Oct. 26 at a spread of 115 bps over Treasuries.

Danone is a food products company based in Paris.

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