High-grade volume at steady downpour; U.S. Bancorp, Ingredion, GATX price; heavy supply eyed

By Cristal Cody

Tupelo, Miss., May 8 – High-grade volume continued at a strong pace on Friday with more than $6.85 billion of bonds priced, pushing week to date volume to nearly $100 billion.

U.S. Bancorp sold $1.5 billion of five-year senior notes 20 basis points tighter than talk.

Ingredion Inc. priced $1 billion of senior notes in two parts 15 bps to 20 bps better than talk.

Lincoln National Corp. brought $800 million of senior notes in two tranches 25 bps tighter than initial guidance.

GATX Corp. sold $500 million of 10-year senior notes 15 bps in from talk.

Verisk Analytics, Inc.’s $500 million offering of 30-year senior notes came 32.5 bps better than initial guidance.

Public Service Co. of Colorado priced $750 million of first mortgage bonds in two tranches, including a green issue that printed 25 bps tighter than guidance.

AvalonBay Communities, Inc. sold $600 million of medium-term notes due Jan. 15, 2031 on Friday 43 bps better than initial talk and on the tight side of guidance.

First American Financial Corp. brought an upsized $450 million of 10-year senior notes to the market 37.5 bps better than initial price talk.

Also on Friday, Flex Ltd., a global electronics manufacturer based in Singapore with U.S. headquarters in San Jose, Calif., sold $750 million of senior notes in two tranches.

Investment-grade volume totals more than $93 billion this week, outpacing the $60 billion to $75 billion of volume on average expected for the week.

Looking ahead to next week, supply is expected to remain strong as issuers continue to pour into the primary market at a dizzying pace.

About $75 billion of new investment-grade issuance is anticipated to hit the primary market next week, sources said.

Weak economic data including a record unemployment figure for April was digested handily by market participants on Friday.

The Markit CDX North American Investment Grade 33 index was modestly softer on the day at a spread of 91.7 bps. Credit spreads were just over 1 bp wider on the week.

The Labor Department announced that the unemployment rate rose to 14.7% in April from 4.4% in March, while total non-farm payroll employment fell by 20.5 million from the coronavirus pandemic impact.

The unemployment rate came in lower than market forecasts of a 16% drop.

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

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