Morning Commentary: Viacom, LyondellBasell in high-grade bond deal pipeline; Goldman, Ryder soften

By Cristal Cody

Tupelo, Miss., Feb. 21 – Viacom Inc. and LyondellBasell Industries NV announced plans on Tuesday to tap the investment-grade market with new bond offerings.

About $15 billion to $25 billion of high-grade issuance is expected over the short market week, according to syndicate sources.

New bonds were seen softening in the secondary market following the long holiday weekend.

Goldman Sachs Group Inc.’s 3.85% notes due Jan. 26, 2027 that were reopened in the previous week weakened in secondary trading.

Ryder System, Inc.’s 2.8% medium-term notes due March 1, 2022 that priced on Thursday traded modestly softer early Tuesday.

The three-month Libor yield dropped 1 basis point to 1.05% over the morning, a market source said.

On Friday, $13.4 billion of high-grade bonds were traded, according to Trace.

Goldman softens

Goldman Sachs’ 3.85% notes due Jan. 26, 2027 softened to 100.32 in early secondary trading on Tuesday from where the paper went out on Friday at 102.88, according to a market source.

Goldman Sachs sold $1.25 billion of the 10-year notes (A3/A) in a reopening on Feb. 13 at 100.146 to yield 3.832% and a spread of Treasuries plus 140 bps.

The company originally sold $1.75 billion of the 10-year notes on Jan. 23 at 99.72 to yield 3.884%, or Treasuries plus 148 bps.

The banking, securities and investment management company is based in New York.

Ryder softens

Ryder System’s 2.8% notes due 2022 were modestly weaker at 99.99 over the morning, a market source said.

The notes traded on Friday at 100.10.

Ryder System priced $300 million of the notes (Baa1/BBB+/A-) on Thursday at 99.837 and a spread of 90 bps over Treasuries.

Ryder System is a Miami-based truck rental and fleet management company.

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