Morning Commentary: UnitedHealth plans five-part deal; BB&T notes on tap; FedEx firms

By Cristal Cody

Tupelo, Miss., July 23 – A couple of issuers announced new bond offerings in the high-grade market at the start of Tuesday’s session.

UnitedHealth Group, Inc. is marketing five tranches of fixed-rate notes.

BB&T Corp. is returning to the primary market to price five-year medium-term notes a day after selling $1.7 billion of $1,000-par fixed-rate reset non-cumulative perpetual preferred shares with a 4.8% dividend. BB&T’s preferreds priced better than initial talk in the 5% area.

Including BB&T’s preferred deal, investment-grade issuers priced more than $4 billion of securities on Monday.

Excluding BB&T’s deal, volume was led by FedEx Corp.’s $1 billion of new 3.1% guaranteed senior notes due Aug. 5, 2029.

FedEx’s notes improved 4 basis points in secondary trading, according to a market source.

The 3.1% notes priced Monday at a spread of Treasuries plus 110 bps.

Synchrony Financial’s $750 million of 2.85% senior notes due July 25, 2022 brought to the market on Monday tightened about 8 bps to the 102 bps area in the secondary market, the source said.

The notes priced at a Treasuries plus 110 bps spread.

Meanwhile, a handful of deals are in the works.

Bank of Montreal held fixed income investor calls on Monday for a dollar-denominated offering of fixed-rate resetting non-cumulative subordinated additional tier 1 capital notes.

Also on Monday, Boston Gas Co. held fixed income investor calls for a Rule 144A and Regulation S dollar-denominated offering of 10-year senior notes.

In addition, Ontario Teachers’ Finance Trust is preparing to hold a roadshow in North America, Europe and Asia soon for a Rule 144A and Regulation S dollar-denominated bond offering.

About $15 billion to $20 billion of deal volume is forecast by market sources for this week.

Bank and financial supply remains in the forefront following the releases of earnings reports, which began last week with deals from Morgan Stanley, Bank of America Corp. and PNC Financial Services Group, Inc.

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