Morning Commentary: Bank of Nova Scotia plans deal; new issues firm, Verizon notes improve

By Cristal Cody

Tupelo, Miss., Feb. 6 – Bank of Nova Scotia marketed a dollar-denominated offering of bail-inable senior notes early Wednesday.

The issue is registered with the Securities and Exchange Commission.

Otherwise, the primary market was quiet over the morning. Supply has thinned over the week with just over $7 billion of investment-grade bonds pricing in the first two sessions.

Market sources expected about $15 billion to $20 billion of high-grade supply this week, with some expecting as little as $10 billion.

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

Verizon Communications Inc. led volume on Tuesday with a $1 billion offering of 10-year green bonds.

New issues priced this week have traded mostly flat to tighter than issuance, a market source said.

Verizon’s 3.875% notes due Feb. 8, 2029 firmed about 4 basis points to the 116 bps area in the secondary market.

Verizon sold the notes (Baa1/BBB+/A-) on Tuesday at a spread of Treasuries plus 120 bps.

The notes priced on the tight side of guidance in the Treasuries plus 125 bps area and better than initial talk in the 140 bps spread area.

Secondary market volume was heavy on Tuesday with $27.31 billion of investment-grade issues traded, according to Trace data. On Monday, $19.67 billion of high-grade bonds were traded.

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