Morning Commentary: NextEra, Marriott, Owl Rock on tap; Diageo notes flat to tighter

By Cristal Cody

Tupelo, Miss., Oct. 1 – A handful of companies marketed new investment-grade bonds at the start of Tuesday’s session.

NextEra Energy Capital Holdings Inc. is on deck with an offering of 10-year guaranteed debentures.

Marriott International Inc. plans to price fixed-rate notes.

Owl Rock Capital Advisors LLC also is offering senior notes.

Investment-grade companies priced a reported $3.45 billion of bonds on Monday.

Volume is expected to slow in October after the busiest September on record in the high-grade bond market, sources report.

About $10 billion to $15 billion of issuance is anticipated by syndicate sources this week, while October is forecast to see about $80 billion to $90 billion of total supply.

In the secondary market, Diageo Capital plc’s $1.6 billion of guaranteed notes (A3/A-) priced in two tranches on Monday traded flat to about 8 basis points tighter than issuance, according to a market source.

The $1 billion tranche of 2.375% notes due Oct. 24, 2029 improved 8 bps.

The 10-year notes priced on top of guidance at a Treasuries plus 80 bps spread.

Initial talk on the tranche was in the Treasuries plus 90 bps to 95 bps area.

The notes are guaranteed by London-based premium drink company Diageo plc.

Overall high-grade corporate secondary trading volume totaled more than $22.4 billion on Monday, according to Trace data.

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