Morning Commentary: High-grade primary market active, Westpac, Schwab, Smucker offer bonds

By Cristal Cody

Tupelo, Miss., Dec. 4 – Several issuers lined up bond offerings early Monday, while pricing action is expected to stay heavy over the week in the investment-grade market.

Issuers including Westpac Banking Corp., Charles Schwab Corp., Public Service Electric and Gas Co., J.M. Smucker Co., Canada’s Province of New Brunswick and Baker Hughes, a GE Co., LLC are marketing U.S. dollar-denominated notes.

About $30 billion of deal volume is expected by market participants for the week.

In other action, AT&T Inc.’s bonds (Baa1/BBB+/A-) remain heavily traded and were active in the secondary market over the morning, a source said.

AT&T’s 3.9% notes due Aug. 14, 2027 last traded at 104.35 and have been trading over the past week with a 102 handle.

The notes have traded up from the 99.51 area since the Justice Department announced in November that it had filed a federal lawsuit to stop the company’s $85.4 billion cash and stock acquisition of Time Warner Inc. that was set to close before the end of the year.

AT&T sold $5 billion of the notes on July 27 at 99.827 to yield 3.92% and a spread of 160 basis points over Treasuries.

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) were last seen trading in the secondary market on Friday at 96.34.

The New York-based media and entertainment company sold $800 million of the notes on May 5, 2016 at 98.70 to yield 3.1%, or a spread of Treasuries plus 135 bps.

On Friday, a total of $13.64 billion of high-grade bonds were traded, according to Trace.

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