Morning Commentary: Verizon to sell five tranches; Standard Chartered, others on deck

By Cristal Cody

Tupelo, Miss., Nov. 10 – Strong pricing action is expected to continue on Tuesday in the high-grade primary market with issuers including Verizon Communications Inc., Standard Chartered plc and L3Harris Technologies, Inc. offering bonds.

Verizon Communications is marketing five tranches of fixed-rate senior notes (Baa1/BBB+/A-).

The deal includes five-year notes with initial talk at the Treasuries plus 60 basis points area, 10-year notes talked at the 105 bps spread area, 20-year notes talked at the 135 bps to 140 bps over Treasuries area, 30-year notes guided at the 135 bps spread area and 40-year notes talked to price at the Treasuries plus 150 bps area.

Standard Chartered is marketing dollar-denominated subordinated notes due Feb. 18, 2036 (Baa2/BBB-/BBB+) over the day.

Initial price guidance is in the Treasuries plus 260 bps area.

L3Harris Technologies intends to tap the primary market with 10-year fixed-rate notes (Baa3/BBB/BBB) that are talked to print in the Treasuries plus 115 bps area.

Also on Tuesday, Rexford Industrial Realty, Inc. is marketing 10-year guaranteed senior notes that are initially talked to price with a spread at the 162.5 bps over Treasuries area.

Meanwhile, Procter & Gamble Co. is returning to the primary market with an offering of floating-rate notes due 2070 (Aa3/AA-).

Other supply

Also, Brighthouse Financial Inc. is offering $200 million of split-rated $25-par preferred stock (Ba2/BBB-/BB+) talked to print at the 5.5% area.

In addition, Allianz SE intends to price $1.25 billion of perpetual preferred shares (expected ratings Baa1/A) guided at the 3.875% area.

The investment-grade primary market roared back to life on Monday with more than $19 billion of deal volume that was led by Bristol-Myers Squibb Co.’s $7 billion six-part offering of senior notes (A2/A+).

About $25 billion to $30 billion of high-grade supply is expected this week with issuance anticipated to be front-loaded ahead of Wednesday’s Veterans Day holiday in the United States, syndicate sources said.

Last week, high-grade issuance totaled just $2.5 billion from a four-part offering of notes (Baa1/A-/BBB+) from Waste Management, Inc.

Market tone was mixed at the start of the session as legal challenges continue in the U.S. presidential election.

The iShares iBoxx Investment Grade Corporate Bond ETF improved 0.11% to $135.31.

The Pimco Investment Grade Corporate Bond index softened 0.08% to $115.01.

Stocks were mixed over the morning with the Dow Jones industrial average up 0.62%, the S&P 500 off 0.3% and the Nasdaq down 1.29%.

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