Morning Commentary: Brookfield, Exelon, Enstar to price; new bonds mixed in secondary market

By Cristal Cody

Tupelo, Miss., March 7 – Investment-grade pricing action is set to stay strong over Tuesday’s session, while the near-term deal pipeline also is building, according to market sources.

Issuers including Brookfield Finance LLC, Pacific Gas and Electric Co., Exelon Generation Co., LLC and Enstar Group Ltd. are marketing notes.

New bonds were mixed in the secondary market early Tuesday.

Burlington Northern Santa Fe, LLC’s $1.25 billion of senior debentures (A3/A) that priced in two parts on Monday were mixed, with the 10-year bonds slightly better.

McDonald’s Corp.’s $2 billion of senior notes (Baa1/BBB+/BBB) that priced in three parts on Monday traded modestly softer on Tuesday.

On Monday, $22.67 billion of high-grade bonds were traded, according to Trace.

Burlington Northern mixed

Burlington Northern Santa Fe’s 3.25% debentures due June 15, 2027 traded up to 99.91 early Tuesday, according to a market source.

The company priced $500 million of the debentures on Monday at 99.747 to yield 3.278%, or a spread of Treasuries plus 78 basis points.

Burlington Northern Santa Fe’s 4.125% debentures due June 15, 2047 softened to 98.44 in the secondary market.

The $750 million tranche priced on Monday at 98.857 to yield 4.191%, or Treasuries plus 108 bps.

The holding company for railroad transportation subsidiaries is based in Fort Worth, Texas.

McDonald’s softens

McDonald’s 2.625% notes due Jan. 15, 2022 softened to 99.61 in the secondary market on Tuesday, a source said.

McDonald’s sold $600 million in a reopening of the notes on Monday at 99.935 to yield 2.639% and a spread of Treasuries plus 62 bps.

The company originally priced $500 million of the notes on Sept. 27, 2011.

McDonald’s 3.5% notes due March 1, 2027 weakened to 99.33 from where the notes priced on Monday.

McDonald’s sold $850 million of the notes at 99.476 to yield 3.563% and a Treasuries plus 107 bps spread.

The fast food chain is based in Oak Brook, Ill.

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