Morning Commentary: Aqua America markets notes; Omers, Cantor Fitzgerald eye primary

By Cristal Cody

Tupelo, Miss., April 24 – Aqua America Inc. announced a two-part offering of fixed-rate senior notes (A) on Wednesday following the company’s fixed income investor calls earlier in the week.

The company plans to price 10- and 30-year notes.

In the previous week, the water utility announced on Thursday that it had priced $1 billion of common stock and $585.8 million of tangible equity units to in part fund the $4.28 billion cash and debt acquisition of Peoples Natural Gas that was first announced in October.

Proceeds from the investment-grade bond offering will be used to fund the acquisition of the limited liability company membership interests to Peoples Natural Gas parent LDC Funding LLC and complete the redemption of about $314 million of outstanding Aqua America notes.

The publicly traded water utility will hold its first-quarter earnings call on May 3. The merger is expected to be completed in mid-2019.

Meanwhile, Omers Finance Trust is holding fixed income investor calls for a previously announced Rule 144A and Regulation S offering of dollar-denominated five-year notes, according to a market source.

In addition, Cantor Fitzgerald is among the high-grade companies conducting fixed income investor calls this week for possible deals, a source said.

Last week following earnings reports, the primary market hosted several deals from bank and financial issuers.

Morgan Stanley announced on Wednesday it plans to tap the European market with euro-denominated five-year fixed-to-floating rate senior notes.

Dollar-denominated high-grade volume week to date totals more than $2 billion.

On Tuesday, Rogers Communications Inc., Kimberly-Clark Corp., Marubeni Corp. and Lloyds Bank Corporate Markets plc priced $2.55 billion of notes.

On Monday, the only offering in the high-grade market was a $450 million preferred stock deal from KeyCorp.

About $15 billion to $25 billion of supply this week is expected on average from market sources.

In the secondary market, trading volume climbed to $22.08 billion on Tuesday from $14 billion on Monday, according to Trace data.

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