Morning Commentary: RBS, Scentre Management, AutoNation, energy, SSA issuers offer notes

By Cristal Cody

Tupelo, Miss., May 19 – Corporate and sovereign, supranational and agency supply is expected in the high-grade primary market on Tuesday, sources report.

Royal Bank of Scotland Group plc (Baa2/BBB/A) is offering two tranches of notes, including eight-year notes talked to price at the Treasuries plus 280 basis points area and a four-year green bond talked at the 245 bps spread area on Tuesday.

Scentre Management Ltd. plans to bring two tranches of notes (A2/A) to the primary market on Tuesday. The deal includes six-year notes talked at the 400 bps over Treasuries area and 10-year notes talked at the 412.5 bps spread area.

Meanwhile, utility issuance is expected to continue on Tuesday.

Arizona Public Service Co. is marketing $600 million of 30-year senior notes (A2/A-/A) with initial price guidance in the 230 bps over Treasuries area.

Entergy Mississippi, Inc. intends to price $170 million of 31-year first mortgage bonds (A2/A) that are talked to print with a spread in the Treasuries plus 225 bps area.

Kentucky Utilities Co. is marketing $400 million of 30-year first mortgage bonds (A1/A) with initial guidance in the 225 bps over Treasuries area.

National Fuel Gas Co. intends to price $300 million of long five-year notes (Baa3/BBB/BBB) on Tuesday. Initial price talk is in the 600 bps over Treasuries area.

Also on Tuesday, AutoNation Inc. is offering $400 million of 10-year senior notes (Baa3/BBB-/BBB-) with initial guidance in the 475 bps to 487.5 bps over Treasuries area.

In addition, Truist Financial Corp. is marketing $200 million of $25-par perpetual non-cumulative preferred stock (Baa2/BBB-/BBB) with initial talk in the 5.25% to 5.375% area.

In other activity, Banco Santander, SA (Baa1/A-/A-) will wrap up a two-day round of fixed income investor calls on Tuesday for a dollar-denominated offering of senior notes.

SSA volume

Looking at SSA primary action, Landwirtschaftliche Rentenbank (Aaa/AAA/AAA) launched a $2 billion registered offering of five-year senior notes on Tuesday at mid-swaps plus 21 bps with a book size of nearly $4 billion.

Initial price talk was in the mid-swaps plus 24 bps area.

The Kingdom of Belgium (Aa3/AA/AA) launched an upsized $1.5 billion offering of 10-year notes on Tuesday at mid-swaps plus 36 bps.

Initial price talk was in the mid-swaps plus 37 bps area.

The deal was upsized from $1 billion.

Also, the Province of Quebec (Aa2/AA-/AA-) intends to price $1 billion of 10-year global notes on Tuesday.

The notes were initially talked to price at the mid-swaps plus 68 bps area with the notes launched at mid-swaps plus 67 bps.

About $30 billion to $40 billion of investment-grade volume is forecast for the short market week. Front-loaded issuance was expected ahead of the early market close on Friday and Memorial Day holiday on Monday.

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