Morning Commentary: High-grade supply climbs; Merck, Wabtec, BorgWarner, Perrigo on tap

By Cristal Cody

Tupelo, Miss., June 16 – Investment-grade action revved up on Tuesday with numerous issuers expected to tap the primary market after thin supply on Monday, sources said.

Merck & Co., Inc. is marketing four tranches of fixed-rate notes (A1/AA).

Westinghouse Air Brake Technologies Corp. (Baa3/BBB/BBB-) is offering senior notes following fixed income investor calls held Monday.

BorgWarner Inc. (Baa1/BBB+) is on deck with fixed-rate senior notes following fixed income investor calls on Monday.

Perrigo Finance Unlimited Co. also is marketing fixed-rate senior notes (Baa3/BBB-) following fixed income investor calls for the offering on Friday. The notes are guaranteed by parent Perrigo Co. plc, a Dublin-based pharmaceutical manufacturer.

Office Properties Income Trust is returning to the primary market on Tuesday after the company postponed a $300 million offering of senior notes due Sept. 15, 2027 (Baa3/BBB-) on May 6. The newest offering features $25-par 30-year notes.

In other supply, Welltower Inc. expects to bring new senior notes (Baa1/BBB+/BBB+) on Tuesday.

CIT Group Inc. (Aa3/A+/A+) is offering senior fixed-to-floating rate notes.

Ford Motor Credit Co. LLC plans to price a benchmark offering of five-year notes (expected ratings Ba2/BB+) being executed off the investment-grade desk.

Carrier Global Corp. plans to price a Rule 144A and Regulation S offering of senior notes (Baa3/BBB).

Amerant Bancorp Inc. is marketing split-rated five-year senior notes (///BB+/Kroll: BBB) during the session.

In other activity, Amcor plc is returning to the primary market on Tuesday to price the euro-denominated portion of senior notes following subsidiary Bemis Co., Inc.’s $500 million sale of 10-year senior notes (Baa2/BBB) on Friday.

Also on Tuesday, Kommuninvest I Sverige AB (Aaa/AAA) is offering $1 billion of notes due Feb. 16, 2024 with initial price talk in the mid-swaps plus 22 basis points area.

A deal also is anticipated from Pacific Gas and Electric Co., which is offering a $5,925,000,000 offering of first mortgage bonds (Baa3/BBB-/BBB-) in six tranches as part of its reorganization funding from Chapter 11 bankruptcy.

In other activity, Upjohn Inc. is holding fixed income investor calls that started Monday for a multiple-tranche offering of senior notes (Baa3/BBB-/BBB) totaling about $12 billion as part of its spinoff from Pfizer Inc. and merger with Mylan NV.

About $20 billion to as much as $40 billion of high-grade supply is expected by market participants for the week.

On Monday, deal volume was light with two issuers reported in the primary market.

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