Steady U.S., Canada April supply on tap; bonds improve; Exelon, Keysight Technologies tighten

By Cristal Cody

Tupelo, Miss., March 31 – Investment-grade issuers took a breather on Friday with no reported bonds priced over the session.

Deal volume is forecast as steady in the upcoming week with about $20 billion to $25 billion of issuance expected by syndicate sources.

Issuers likely will want to price ahead of the French elections and Easter holiday, sources report.

About $90 billion to $100 billion of U.S. supply is forecast by market participants for April.

Canada likely will see about C$7 billion to C$9 billion following C$11.1 billion of issuance in March, a syndicate source said.

“The Canadian banks don’t appear to have a huge need but a lot of the corporates are still poking around,” the source said. “The lack of bank activity opens the door for maple issuers. I think it will be a solid month.”

In the secondary market, new issues priced over the week traded mostly tighter.

Exelon Corp.’s $1.15 billion of five-year junior subordinated notes priced in a remarketing on Wednesday firmed 9 basis points.

Union Pacific Corp.’s $1 billion of senior notes (A3/A/) priced in two tranches in a mid-week offering traded about 1 bp to 2 bps better.

Keysight Technologies Inc.’s 4.6% senior notes due April 6, 2027 brought to market in a $700 million deal on Tuesday tightened about 8 bps.

In other secondary trading, AT&T Inc.’s 4.25% notes due March 1, 2027 softened about 1 bp on Friday.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 recovered some gains after softening on Thursday.

The Markit CDX North American Investment Grade index firmed about 1 bp to a spread of 66 bps.

Exelon tightens

Exelon’s 3.497% notes due June 1, 2022 traded on Friday at 141 bps bid, 139 bps offered, according to a market source.

Exelon sold $1.15 billion of the notes (Baa3/BBB-/BBB-) in a remarketing on Wednesday at a spread of 150 bps over Treasuries.

The notes were originally issued as 2.5% notes due 2024 and as a component of the equity units sold by the company in June 2014.

Exelon is the parent of Exelon Generation and is a utility services holding company based in Chicago.

Union Pacific stronger

Union Pacific’s 3% notes due April 15, 2027 were quoted at 76 bps bid, 74 bps offered in secondary trading on Friday, according to a market source.

Union Pacific sold $500 million of the notes on Wednesday at a spread of 77 bps over Treasuries.

The company’s 4% notes due April 15, 2047 tightened to 105 bps bid, 102 bps offered.

Union Pacific sold $500 million of the 30-year notes at a spread of Treasuries plus 107 bps.

The railroad transportation company is based in Omaha, Neb.

Keysight Technologies firms

Keysight Technologies’ 4.6% notes due April 6, 2027 traded better than issuance on Friday at 212 bps bid, 207 bps offered, a market source said.

Keysight Technologies priced $700 million of the 10-year notes (Baa3/BBB-/BBB) on Tuesday at a spread of 220 bps over Treasuries.

Proceeds from the deal are to be used along with other sale proceeds and borrowings to fund its acquisition of Ixia. The notes have a mandatory call at 101.00 if the merger with Ixia does not close by Dec. 31.

Keysight Technologies is a Santa Rosa, Calif.-based electronic measurement technology company.

AT&T eases

AT&T’s 4.25% notes due March 1, 2027 eased about 1 bp on Friday to 166 bps bid, according to a market source.

The company priced $2 billion of 4.25% notes due March 1, 2027 (Baa1/BBB+/A-) on Jan. 31 at a spread of Treasuries plus 180 bps.

AT&T is a Dallas-based telecommunications company.

Verizon improves

Verizon Communications’ 4.125% notes due March 16, 2027 traded about 3 bps better on Friday at 152 bps bid after widening 5 bps in the previous session, a market source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

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