Morning Commentary: High-grade supply continues; Ingredion, Lincoln National on tap

By Cristal Cody

Tupelo, Miss., May 8 – High-grade volume is set to remain strong on Friday with numerous companies offering bonds in the primary market.

Ingredion Inc. is offering two tranches of senior notes during the session. A tranche of 10-year notes is talked to price in the Treasuries plus 245 basis points area, while a 30-year issue is talked at the 275 bps spread area.

Lincoln National Corp. also plans to sell two tranches of senior notes on Friday. The deal includes notes due Jan. 15, 2031 talked at the 300 bps spread area and 30-year notes talked to print in the 325 bps over Treasuries area.

In addition, Public Service Co. of Colorado intends to sell two tranches of first mortgage bonds, including a green issue. The company is marketing bonds due Jan. 15, 2031 with initial talk in the Treasuries plus 140 bps area and green bonds due Jan. 15, 2051 that are talked at the 165 bps spread area.

Meanwhile, AvalonBay Communities, Inc. plans to bring medium-term notes due Jan. 15, 2031 with initial price talk in the 225 bps spread area to the primary market on Friday.

GATX Corp. is offering $500 million of 10-year senior notes that are initially guided to print at the 350 bps over Treasuries area.

Verisk Analytics, Inc. expects to bring a $500 million offering of 30-year senior notes to the primary market. Initial price talk is in the 262.5 bps over Treasuries area.

First American Financial Corp. intends to price $300 million of new 10-year senior notes that are talked at the Treasuries plus 375 bps area.

Also on Friday, U.S. Bank NA is offering five-year senior notes with initial guidance at the 135 bps spread area.

Investment-grade volume totals more than $81 billion week to date.

About $60 billion to $75 billion of volume was expected for the week.

Meanwhile, market data including a record unemployment figure for April was being digested by market participants over the morning.

The Labor Department announced on Friday that the unemployment rate rose to 14.7% in April, while total non-farm payroll employment fell by 20.5 million from the coronavirus pandemic impact.

The unemployment rate came in lower than market forecast of 16%.

“Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality,” the Labor Department said in a news release.

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