Morning Commentary: Session opens with strong supply; Kraft Heinz, energy issuers offer notes

By Cristal Cody

Tupelo, Miss., June 4 – At least seven high-grade issuers moved forward with plans early Monday to tap the primary market with new bond offerings.

Syndicate sources report they expect about $25 billion of deal volume for the week.

Deal action kicked off Monday with offerings announced from Kraft Heinz Foods Co., WEC Energy Group, Inc., Tampa Electric Co., PSEG Power LLC, Puget Sound Energy, Inc., Kennametal Inc. and Japan International Cooperation Agency.

Issuers priced more than $5 billion of investment-grade bonds in the previous week, including two deals brought to market on Friday from Moody’s Corp. and Texas Instruments Inc.

Supply is expected to remain elevated in June with sources forecasting about $80 billion to as much as $100 billion of issuance over the month.

High-grade corporate supply has averaged nearly $91 billion in June over the past three years, a source said.

Several bond offerings tied to financing for mergers and acquisitions are expected over the month, according to market sources.

Bayer AG’s $63 billion acquisition of Monsanto Co. is set to close this week.

In the secondary market, investment-grade trading volume on Friday totaled $15.98 billion, according to Trace.

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