Enterprise Products, Highwoods, FedEx price; Truist offers notes; high-grade inflows increase

By Cristal Cody

Tupelo, Miss., July 30 – High-grade supply picked up on Thursday with the financial markets modestly softer on the day despite dismal economic data.

Enterprise Products Operating LLC sold $1.25 billion of guaranteed fixed-rate senior notes (Baa1/BBB+/BBB+) in two tranches that included an add-on to its 2.8% notes due Jan. 31, 2030 and a new $1 billion issue of 3.2% notes due Feb. 15, 2052.

Federal Express Corp. priced an upsized $970 million of 1.875% class AA pass-through enhanced equipment trust certificates (Aa3/AA-/) following fixed income investor calls on Wednesday. The deal was upsized from $690 million to finance additional aircraft.

Highwoods Realty LP came by the primary market with $400 million of 2.6% notes due Feb. 1, 2031 (Baa2/BBB/) to in part fund a cash tender offer for the company’s 3.2% notes due 2021.

Also on Thursday, Truist Financial Corp. offered seven-year senior medium-term notes (A3/A-/A+) and $25-par perpetual preferred stock.

In other activity over the day, Washington Real Estate Investment Trust (Baa2/BBB/) held fixed income investor calls to update investors with possible issuance to follow, sources report.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

Nearly $23 billion of investment-grade issues have priced week to date, beating market forecasts of about $10 billion to $15 billion of supply this week.

Inflows remained strong for high-grade corporate funds for the past week ended Wednesday, according to Refinitive Lipper US Fund Flows.

Inflows rose to $7.9 billion from $7.75 billion in the previous week and $4.53 billion in the week prior.

The week’s supply was given a boost from AT&T Inc.’s $11 billion five-part offering of senior global notes (Baa2/BBB/A-) that priced on Monday.

The notes were seen trading flat to tighter on the short end in the secondary market, a source said.

AT&T’s 1.65% notes due Feb. 1, 2028 improved to 107 basis points bid.

The notes priced in a $2.25 billion tranche at a spread of Treasuries plus 120 bps.

Initial price talk was in the Treasuries plus 150 bps area.

Market tone had improved over Wednesday’s session but stayed soft on Thursday soft following weak economic data.

The Bureau of Economic Analysis reported the second quarter real gross domestic product plunged 32.9% on an annualized basis but was still below the 34.5% decline market analysts expected.

The Markit CDX North American Investment Grade 33 index ended modestly weaker over the day at a spread of 69.77 bps.

The PIMCO Investment Grade Corporate Bond Index declined 0.03% to 117.07.

The iShares iBoxx Investment Grade Corporate Bond ETF closed down 0.11% at 138.16.

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