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Morning Commentary: Pre-holiday investment-grade primary market thins; Wells Fargo slightly better
By Cristal Cody
Eureka Springs, Ark., Dec. 16 – The high-grade bond market is expected to wind down heading into the Christmas Day holiday with no new issuers on deck early Friday.
UnitedHealth Group Inc. provided additional details of its $1.5 billion two-tranche notes sale on Thursday.
In the secondary market, bonds were mixed.
Wells Fargo & Co.’s 3% notes due 2026 were seen about 1 basis point tighter.
Secondary trading volume has remained strong over the week. On Thursday, $18.37 billion of investment-grade issues were traded, compared to $16.7 billion on Wednesday, $19.31 billion on Tuesday and $16.5 billion on Monday, according to Trace.
UnitedHealth details deal
UnitedHealth Group provided additional details of its previously reported $1.5 billion two-part issuance on Thursday of fixed-rate notes (A3/A+/A-) in an FWP filing with the Securities and Exchange Commission.
The company sold $750 million of 3.45% 10-year notes at 99.896 to yield 3.462%, or 85 basis points over Treasuries.
UnitedHealth placed $750 million of 4.2% 30-year notes at 99.253 to yield 4.244%. The bonds priced with a Treasuries plus 105 bps spread.
The notes priced on the tight side of guidance, according to a market source.
BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the bookrunners.
The Minnetonka, Minn.-based diversified health company plans to use the proceeds from the offering to repay commercial paper borrowings and for other general corporate purposes.
Wells Fargo firms
Wells Fargo’s 3% notes due 2026 traded about 1 bp better at 114 bps offered, according to a market source.
Wells Fargo sold $3.5 billion of the notes (A2/A/AA-) on Oct. 19 at a spread of Treasuries plus 130 bps.
The retail, commercial and corporate banking services provider is based in San Francisco.
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