Expedia, Aviation Capital, KfW price; Kimco sells green bond; Japan Bank markets notes

By Cristal Cody

Tupelo, Miss., July 7 – High-grade supply on Tuesday include new corporate and sovereign, supranational and agency issuance.

Expedia Inc. priced a $1.25 billion a Rule 144A and Regulation S two-part offering of senior notes (Baa3/BBB-/) better than initial talk.

Expedia was last in the primary market on April 23 with a $2.75 billion two-part offering of senior notes.

Aviation Capital Group LLC (Baa2/BBB-/BBB-) also brought a Rule 144A and Regulation S transaction to the primary market on Tuesday. The company sold $1 billion of senior notes due Dec. 15, 2024 better than guidance.

In registered pricing action, Kimco Realty Corp. sold $500 million of long 10-year notes (Baa1/BBB+/) on Tuesday 45 basis points tighter than initial talk.

Also, KfW (Aaa/AAA/AAA) priced $5 billion of five-year global notes better than guidance.

Meanwhile, Japan Bank for International Cooperation is marketing a registered offering of five-year guaranteed bonds (A1/A+/) that are expected to price on Wednesday. Price talk is at the mid-swaps plus 36 bps area.

Japan Bank was previously in the primary market on May 13 with a $2 billion sale of three-year guaranteed bonds.

Deal volume week to date includes $13 billion of investment-grade bonds priced on Monday, led by Mizuho Financial Group, Inc.’s $2.5 billion three-tranche offering of senior notes (A1/A-/) in the first diversity and inclusion bond issuance by a Japanese bank.

Investment-grade supply is expected by market participants to reach about $20 billion to $25 billion this week.

Realty Income firms

In the secondary market, Realty Income Corp.’s 3.25% senior notes due Jan. 15, 2031 (A3/A-/BBB+) reopened on Monday tightened about 5 bps, a source said.

Realty Income priced a $350 million add-on to the notes at 108.241 to yield 2.341% and a spread of 165 bps over Treasuries.

The issue first priced in a $600 million offering on May 6 at 98.987 to yield 3.364%, or Treasuries plus 265 bps. The total outstanding is now $950 million.

Market tone was mixed over the day.

The iShares iBoxx Investment Grade Corporate Bond ETF improved 0.13% to 135.58.

The PIMCO Investment Grade Corporate Bond Index rose 0.18% to close at 115.01.

High-grade credit spreads eased about 1 bp on the day.

The Markit CDX North American Investment Grade 33 index ended the session at a spread of 72.78 bps.

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