Morning Commentary: High-grade supply heavy; ViacomCBS, Caterpillar, Cades on tap

By Cristal Cody

Tupelo, Miss., May 12 – Heavy investment-grade bond supply is expected from corporate and sovereign, supranational and agency issuers on Tuesday, sources report.

ViacomCBS Inc. is offering two tranches of senior notes (Baa2/BBB/BBB) that include 12-year notes talked at the Treasuries plus 415 basis points area and 30-year notes with initial talk in the 420 bps spread area.

Caterpillar Inc. is on deck with three tranches of senior notes (A3/A/A) on Tuesday that include two fixed-rate tranches and one floating-rate tranche.

AmerisourceBergen Corp. plans to price $500 million of 10-year senior notes (Baa2/A-/A-) on Tuesday that are initially guided at the Treasuries plus 235 bps area.

Appalachian Power Co., which postponed an offering of fixed-rate senior notes on March 20, is returning to the primary market on Tuesday with $400 million of 30-year notes guided at the 260 bps over Treasuries area.

Other corporate issuers expected during the session include E.I. du Pont de Nemours and Co., doing business as Corteva Agriscience, General Motors Financial Co. Inc., Williams Cos., Inc., Xilinx, Inc., Exelon Corp., Bank of New York Mellon Corp., Moody’s Corp. and Japan Bank for International Cooperation.

Meanwhile, Verizon Communications Inc. is tapping the euro-denominated market with two tranches of registered fixed-rate notes on Tuesday.

In SSA supply, Caisse d'Amortissement de la Dette Sociale (Aa2//AA) launched $3 billion of notes due May 19, 2023 on Tuesday at mid-swaps plus 24 bps after tightening guidance.

Guidance was firmed to the mid-swaps plus 27 bps area following initial talk in the mid-swaps plus 30 bps area.

The European Investment Bank (Aaa/AAA/AAA) is marketing $1 billion of registered global sustainable notes due May 17, 2030 on Tuesday at mid-swaps plus 31 bps with a book size of more than $5 billion over the morning.

Initial price talk was in the mid-swaps plus 34 bps area with guidance tightened to the mid-swaps plus 32 bps area.

Also, the European Bank for Reconstruction and Development (Aaa/AAA/AAA) plans to price a dollar-denominated offering of five-year global notes on Tuesday.

The notes due May 19, 2025 are initially talked to price in the mid-swaps plus 20 bps area.

In addition, the Province of Alberta (Aa2/AA) is offering dollar-denominated five-year global notes talked at the mid-swaps plus 65 bps area.

About $75 billion to as much as $100 billion of investment-grade supply is expected this week.

More than $23 billion of high-grade bonds priced on Monday, led by Walt Disney Co.’s $11 billion six-part offering of senior notes (A2/A-/A) and PayPal Holdings Inc.’s $4 billion of notes (A3/BBB+/BBB+) sold in four tranches.

In the secondary market, new issues were seen modestly better, a source said.

PayPal’s notes tightened about 1 bp to 5 bps with the three-year tranche the most improved.

The company’s 1.35% notes due June 1, 2023 firmed 5 bps. The notes were priced in a $1 billion offering at 99.908 to yield 1.381%, or a spread of 115 bps over Treasuries.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.