Morning Commentary: Principal Financial, Brixmor on deck; heavy bond deal pipeline eyed

By Cristal Cody

Tupelo, Miss., May 7 – Bristol-Myers Squibb Co. is being eyed to possibly tap the high-grade primary market on Tuesday following holidays in Europe and Japan that kept some investors out in the previous session.

The company is anticipated to price a Rule 144A and Regulation S offering of 1.5-, two-, three-, five-, seven-, 10-, 20- and 30-year tranches, according to market sources.

Meanwhile, two companies announced plans early Tuesday to price new issues.

Principal Financial Group, Inc. intends to sell $500 million of 10-year senior notes.

Brixmor Operating Partnership LP is offering fixed-rate senior notes.

Also on Tuesday, Fidelity National Information Services, Inc. kicks off a roadshow and fixed-income investor calls for a multi-currency bond deal to help finance its acquisition of Worldpay Inc. The roadshow will continue through Friday.

T-Mobile U.S. Inc.’s roadshow for an upcoming bond offering to fund its acquisition of Sprint Corp. also continues through Wednesday in the U.S. and Europe markets.

About $40 billion to $45 billion of new issuance is forecast by syndicate sources for the week.

In other action on Tuesday, AvalonBay Communities, Inc. will hold fixed income investor calls for a possible offering, a market source said. Barclays, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

The Arlington, Va.-based manager and developer of apartment communities was last reported in the primary market on March 15, 2018 with a $300 million offering of 4.35% medium-term notes due April 15, 2048.

In addition, St. Louis-based Reinsurance Group of America, Inc., a global life and health insurance holding company, will conclude a two-day round of investor calls on Tuesday, a source said. BofA Merrill Lynch, JPMorgan, RBC Capital Markets, LLC and Wells Fargo are the arrangers.

On Monday, utilities priced $2.55 billion of notes in the high-grade market.

American Water Capital Corp. sold $1.1 billion of senior notes in two tranches.

Public Service Electric & Gas Co. priced a $750 million two-part offering of secured medium-term notes.

Consolidated Edison Co. of New York, Inc. brought $700 million of 30-year debentures to the market.

The new issues were mostly better in secondary trading with ConEd’s $700 million of 4.125% debentures due May 15, 2049 (A3/A-/A-) about 1 basis point tighter than issuance, a source said. The debentures priced with a spread of Treasuries plus 122 bps.

Secondary trading volume was light on Monday with $12.45 billion of high-grade corporate bonds traded, according to Trace data.

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