Edison prices tighter than talk; high-grade supply thin on looming Fed decision; spreads firm

By Cristal Cody

Tupelo, Miss., June 18 – High-grade primary action slowed on Tuesday as the Federal Reserve kicked off its two-day monetary policy meeting.

Edison International sold $600 million of 5.75% senior notes due June 15, 2027 at par to yield 5.75%, tighter than initial talk in the 6% area.

In other supply news, Toronto-Dominion Bank priced C$1.75 billion of fixed-to-floating-rate medium-term notes on Tuesday.

High-grade issuers priced more than $4 billion of bonds over Monday’s session.

Supply was eyed to thin this week due to heavier-than-expected volume over the previous two weeks and the Federal Reserve’s monetary policy decision due on Wednesday, sources said.

Market sources do not anticipate a rate cut following the June meeting but expectations are growing for a possible rate cut at the Fed’s July 30-31 meeting.

About $15 billion to $20 billion of investment-grade corporate issuance is forecast by market sources this week with some expecting as little as $10 billion of volume.

Corporate deal volume so far in June includes more than $28 billion of supply last week and more than $24 billion of issuance in the first week of the month.

Meanwhile, spreads tightened on Tuesday. The Markit CDX North American Investment Grade 32 index firmed more than 2 basis points to end at a spread of 58 bps.

Bank and financial paper was mostly stronger on the day, while bonds in the telecommunications sector also improved, a market source said.

In the secondary market, AT&T Inc.’s notes headed out flat to about 10 bps better.

AT&T’s 4.5% notes due March 1, 2029 firmed 5 bps on the day.

Verizon Communications Inc.’s notes traded flat to about 8 bps tighter during the session. The company’s 3.875% green senior notes due Feb. 8, 2029 improved about 4 bps on Tuesday.

In new issue trading, the $500 million of 4.5% notes due June 20, 2029 that A.P. Moller-Mærsk A/S priced on Monday improved about 3 bps, a source said.

The Copenhagen, Denmark-based integrated container shipping company (Baa3/BBB) sold the notes at a Treasuries plus 250 bps spread following a roadshow earlier in June.

Edison prices $600 million

Edison International sold $600 million of 5.75% senior notes due June 15, 2027 (Baa3/BBB-/BBB-) on Tuesday at a spread of 368.7 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes priced at par. Initial price talk was in the 6% area.

Bookrunners were Citigroup Global Markets Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC and RBC Capital Markets, LLC.

Rosemead, Calif.-based Edison International is the parent holding company of electric utility Southern California Edison Co.

TD Bank sells fixed/floaters

Toronto-Dominion Bank (Aa1/AA-/DBRS: AA) priced C$1.75 billion of 3.06% medium-term notes due Jan. 26, 2032 on Tuesday at a spread of 168 bps over the Government of Canada benchmark, according to a market source and a news release.

The non-viability contingent capital notes, which have a long first coupon, priced at 99.964 to yield 3.06%.

The issue will have a fixed rate until Jan. 26, 2027 and thereafter will carry a floating rate at the bankers’ acceptance rate plus 133 basis points.

TD Securities Inc. was the bookrunner.

The bank and financial services company is based in Toronto.

AT&T notes tighten

AT&T’s 4.5% notes due March 1, 2029 traded 5 bps tighter in the secondary market on Tuesday at 149 bps bid, a market source said.

The company sold $3 billion of the 10-year notes on Feb. 13 at a spread of Treasuries plus 170 bps.

AT&T is a Dallas-based telecommunications company.

Verizon issue firms

Verizon Communications’ 3.875% green senior notes due Feb. 8, 2029 were quoted 4 bps better in secondary trading on Tuesday at 105 bps bid, a market source said.

Verizon sold $1 billion of the notes (Baa1/BBB+/A-) on Feb. 5 at a spread of Treasuries plus 120 bps.

The telecommunications company is based in New York City.

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