Takeda, Sumitomo Mitsui, MetLife Global, Equitable Financial, AEP, AIG price; EBRD on deck

By Cristal Cody

Tupelo, Miss., June 29 – Investment-grade issuers priced $12.5 billion of bonds in the primary market on Monday.

Takeda Pharmaceutical Co., Ltd. sold $7 billion of senior notes (Baa2/BBB+/) in four tranches on the tight side of guidance.

Sumitomo Mitsui Financial Group Inc. priced $3 billion of senior notes (A1/A-/) in two tranches 25 basis points tighter than initial talk.

In other supply, Metropolitan Life Global Funding I came by with $750 million of five-year green funding agreement-backed notes (Aa3/AA-/AA-) on Monday.

Equitable Holdings, Inc. subsidiary Equitable Financial Life Global Funding (A2/A+/) priced a $650 million inaugural offering of five-year funding agreement-backed notes.

AEP Texas Inc. sold $600 million of 10-year senior notes (Baa1/A-/) in a deal upsized from $500 million.

Also, AIG Global Funding priced $500 million of three-year senior secured notes (A2/A+/) in an offering upsized from $350 million.

Deal volume already has nearly beaten market forecasts of about $10 billion to $15 billion of supply for the week ahead of the Independence Day holiday break.

The financial markets will close early at 2 p.m. ET on Thursday and remain closed on Friday for the holiday.

Coming up on Tuesday, the European Bank for Reconstruction and Development (Aaa/AAA/AAA) plans to price a $1 billion offering of three-year global notes.

The notes are initially talked to price in the mid-swaps plus 7 bps area.

In other activity on Monday, the Federal Reserve announced criteria for its primary market corporate credit facility that will purchase high-grade corporate bonds from issuers.

Eligible bonds must have a maturity of four years or less from issuers rated at least Baa3/BBB- as of March 22, among other criteria.

Under the up to $750 billion primary and secondary market corporate credit facilities created under the Cares Act, an initial $50 billion will be allocated toward the primary market facility and $25 billion toward the secondary market facility.

Investment-grade credit spreads improved more than 1 bp on Monday after softening about 3 bps on Friday. The Markit CDX North American Investment Grade 33 index closed the day at a spread of 79.81 bps.

Bonds mixed

In the secondary market, Sumitomo Mitsui’s existing paper traded modestly softer on Monday, a source said.

The company’s 2.696% notes due Jan. 15, 2025 headed out at 104.45, down slightly from 104.58 on Friday.

Sumitomo Mitsui Financial sold $2 billion of the notes in its last offering on Jan. 6 at at par to yield a spread of Treasuries plus 85 bps.

The company’s 3.04% notes due Jan. 15, 2030 softened to 105.75 over the day from 106.63 on Friday.

Sumitomo Mitsui sold $2 billion of the 10-year notes in the January offering at par to yield a Treasuries plus 100 bps spread.

AEP Texas’ 3.45% senior notes due Jan. 15, 2050 priced in its most recent offering on Dec. 3, 2019 were not active over the day, according to a market source. The notes were last seen in secondary trading on Friday at 108.02.

The company sold $450 million of the notes at 99.532 to yield 3.475%, or a spread of 130 bps over Treasuries.

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