High-grade market quiets; Airbus in deal pipeline; DTE Energy flat; Verizon, Duke Energy ease

By Cristal Cody

Tupelo, Miss., March 23 – Primary action in the investment-grade bond market came to a standstill on Thursday with corporate and sovereign issuers staying on the sidelines as attention turned to whether a U.S. health care replacement bill would pass Congress, according to market sources.

A House vote on the legislation expected on Thursday was delayed.

Looking ahead in primary action, Airbus Group SE is in the deal pipeline with a dollar senior notes offering.

The Markit CDX North American Investment Grade index was modestly tighter on the day at a spread of 68 basis points.

Bonds were mixed in the secondary market on Thursday.

DTE Energy Co.’s 3.8% senior notes due March 15, 2027 priced earlier in the month were unchanged.

Verizon Communications Inc.’s notes (Baa1/BBB+/A-) were mostly weaker on the day.

Duke Energy Corp.’s 2.65% senior notes due 2026 softened about 2 bps.

Airbus eyes deal

Airbus Group (A2/A+/A-) is expected to price a dollar-denominated offering of senior notes in an upcoming Rule 144A/Regulation S offering, according to a market source.

Citigroup Global markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are arranging fixed-income investor meetings set to start on March 28.

Airbus is an aerospace and defense corporation based in Leiden, Netherlands.

DTE Energy stable

DTE Energy’s 3.8% senior notes due March 15, 2027 were flat in secondary trading on Thursday at 101.43, a market source said.

The company sold $500 million of the notes (Baa1/BBB/BBB+) on March 8 at 99.736 to yield 3.832%, or a spread of 128 bps over Treasuries.

DTE is a Detroit-based diversified energy company.

Verizon softens

Verizon Communications’ 4.125% notes due March 16, 2027 improved to 101.88 from 101.76 earlier in the day but remain soft from where the notes last traded on Wednesday at 102.16, a source said.

Verizon sold $3.25 billion of the notes on March 13 at 99.256 and a spread of Treasuries plus 160 bps.

Verizon’s 2.625% notes due Aug. 15, 2026 were quoted about 1 bp weaker at 134 bps bid, according to a market source.

The bonds were priced in a $2.25 billion offering on July 27 at a spread of Treasuries plus 115 bps.

The telecommunications company is based in New York City.

Duke Energy eases

Duke Energy’s 2.65% notes due Sept. 1, 2026 eased about 2 bps on Thursday to 116 bps bid, a market source said.

The notes have widened about 10 bps since February.

Duke Energy sold $1.5 billion of the notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps over Treasuries.

The diversified energy company is based in Charlotte, N.C.

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