Morning Commentary: Ingersoll-Rand, Royal Bank of Scotland, Nutrien, Essex on deck

By Cristal Cody

Tupelo, Miss., March 19 – Ingersoll-Rand Luxembourg Finance SA is on deck in the high-grade primary market on Tuesday with a three-part offering of fixed-rate guaranteed senior notes.

The deal will be used in part to fund the company’s $1.45 billion acquisition of Precision Flow Systems.

In addition, the Royal Bank of Scotland Group plc plans to price fixed-to-floating rate senior notes due 2025.

Also, Canadian fertilizer manufacturer Nutrien Ltd. released details of a planned two-part offering of dollar-denominated fixed-rate notes.

Meanwhile, Essex Portfolio, LP intends to return to the primary market to bring an add-on to its 4% guaranteed senior notes due March 1, 2029.

The company originally sold $350 million of the notes (Baa1/BBB+/BBB+) on Feb. 4 at 99.188 to yield 4.099%, or a spread of Treasuries plus 137.5 basis points.

Also, Florida Power & Light Co. is marketing 50-year floating-rate notes to price with a coupon of Libor minus 30 bps.

High-grade issuers priced more than $6 billion of bonds on Monday, led by GlaxoSmithKline Capital plc’s $3.5 billion three-tranche offering of notes.

Market sources predict about $20 billion to as much as $30 billion of deal volume this week.

The reverse Yankee market remains active with Nasdaq, Inc. holding fixed income investor meetings in Europe this week ahead of an expected deal, according to a market source. Other recent issuers that have priced reverse Yankee bonds include Marsh & McLennan Cos., Inc., PepsiCo, Inc., Medtronic plc and Coca-Cola Co.

In other action on Tuesday, the Federal Reserve will kick off its two-day monetary policy meeting.

Meanwhile, the high-grade secondary market saw $19.1 billion of corporate trading volume on Monday, according to Trace.

GlaxoSmithKline’s three tranches of notes (A2/A+) firmed about 3 bps to 6 bps in the secondary market after issuance, a source said.

The company’s $1 billion offering of 3.375% notes due June 1, 2029 that priced at a 90 bps over Treasuries firmed to the 87 bps area.

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