Morning Commentary: Verizon offers green bonds; new Micron, Bank of America notes firm

By Cristal Cody

Tupelo, Miss., Feb. 5 – Verizon Communications Inc. launched an offering of green notes on Tuesday after holding fixed income investor calls in the previous session for a dollar-denominated deal.

A dollar-denominated deal along with euro-denominated bonds also may be in the works from Altria Group Inc., which held investor calls on Monday.

Otherwise, investment-grade primary market action was light over the morning.

Most of the Asian markets are closed for the week due to the Lunar New Year celebrations.

Market sources are predicting about $15 billion to $20 billion of high-grade supply this week, with some expecting as little as $10 billion depending on Altria’s offering.

On Monday, high-grade corporate issuers priced $5.7 billion of bonds. The issues tightened about 3 basis points to 15 bps in the secondary market, a source said.

Micron Technology, Inc.’s $1.8 billion of split-rated fixed-rate senior notes (Baa3/BB+/BBB-) that priced in three tranches firmed about 10 bps to 15 bps. The Boise, Idaho-based semiconductor company’s $700 million tranche of 5.327% notes due Feb. 6, 2029 tightened about 12 bps in secondary trading.

Micron priced the notes with a 260 bps over Treasuries spread.

Bank of America Corp.’s $3 billion of 3.974% fixed-to-floating rate notes due Feb. 7, 2030 sold Monday tightened about 4 bps in the secondary market.

The Charlotte, N.C.-based financial services company (A3/A-/A+) priced the notes at a spread of Treasuries plus 125 bps. The rate will reset to Libor plus 121 bps after an initial fixed-rate period.

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