Thin high-grade supply on tap for holiday week; Panasonic plans roadshow; telecoms firm

By Cristal Cody

Tupelo, Miss., July 1 – The investment-grade primary market stayed quiet on Monday as July kicked off with little deal volume expected over the holiday week.

Anywhere from zero to up to $5 billion of supply is forecast with any issuance likely to be front-loaded, syndicate sources said.

The U.S. bond markets will close early at 2 p.m. ET on Wednesday and remain closed on Thursday for the Independence Day holiday.

Monday saw a strong risk-on market tone and trade thanks to the G20 summit in Osaka, Japan, where U.S. president Donald Trump and China’s president Xi Jinping restarted trade talks, sources said.

The Markit CDX North American Investment Grade 32 index tightened more than 1 basis point to close at a spread of 53 bps.

KKR & Co. Inc. subsidiary KKR Group Finance Co. VI LLC announced it closed Monday on its previously reported $500 million offering of 3.75% senior notes due July 1, 2029 that priced on June 17.

Looking ahead to Friday after the holiday, Panasonic Corp. will kick off a global roadshow for a Rule 144A and Regulation S dollar-denominated deal.

June saw just under $83 billion of issuance, while July volume is targeted to total in the $75 billion to $80 billion area, market sources said.

Issuance in the first half of the month is expected to be subdued due to the holiday and earnings blackout reporting periods.

The major U.S. banks will release second-quarter earnings results in mid-July, beginning with Citigroup Inc. on July 15 and concluding with Bank of America Corp. on July 17.

With the Fourth of July holiday and U.S. companies in the earnings-related blackout periods, “the window for busy issuance this summer is effectively the five weeks between July 15th and August 15th,” according to a BofA research note released on Monday.

“In terms of financials, the pace of bank issuance for TLAC purposes has slowed substantially to mostly rolling maturities at this point,” the note said. “Hence we expect relatively light issuance following bank earnings reports this July.”

Meanwhile, in the secondary market on Monday, Fiserv, Inc.’s senior notes (Baa2/BBB) that priced as part of a $9 billion four-part offering on June 7 continued to see strong trading after being among the most active high-grade issues on Friday, a source said. The notes softened modestly but remain better than issuance.

Bonds in the telecommunications sector tightened over Monday’s session, according to a market source.

AT&T Inc.’s 4.35% notes due March 1, 2029 firmed 9 bps on the day.

Verizon Communications Inc.’s 3.875% green senior notes due Feb. 8, 2029 improved about 4 bps.

Panasonic preps new issue

Panasonic (A3/A-/BBB) plans to start a global roadshow on Friday for a Rule 144A and Regulation S dollar-denominated note offering, according to a market source.

The fixed income investor meetings and calls will be held in the U.S., Europe and Asia markets.

BofA Securities, Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are the arrangers.

Panasonic is an electronics company based in Osaka, Japan.

Fiserv active

In secondary trading on Monday, Fiserv’s 3.5% notes due July 1, 2029 softened modestly to 102.70 from where the notes traded on Friday at 102.79, a market source said.

The 10-year notes priced in a $3 billion tranche on June 7 at 99.832 to yield 3.52% and a Treasuries plus 137.5 bps spread.

Fiserv’s $2 billion of 4.4% notes due July 1, 2049 traded slightly weaker on the day at 105.07 from where the notes went out on Friday at 105.15.

The notes priced at 99.388 to yield 4.437% and a 182 bps over Treasuries spread.

Fiserv is a provider of financial services technology and is based in Brookfield, Wis.

AT&T stronger

AT&T’s 4.35% notes due March 1, 2029 firmed to 139 bps bid on Monday from 148 bps in secondary trading on Friday, a market source said.

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

The telecommunications company is based in Dallas.

Verizon improves

Verizon Communications’ 3.875% green senior notes due Feb. 8, 2029 improved 4 bps over the session to 99 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.

Verizon is a telecommunications company based in New York City.

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