Morning Commentary: High-grade deal pipeline fills; Chevron, Discovery to price; MPLX better

By Cristal Cody

Tupelo, Miss., Feb. 28 – A second day of strong pricing action is expected in the high-grade bond market on Tuesday following more than $10 billion of deal volume in the previous session.

Chevron Corp. is marketing seven tranches of fixed- and floating-rate notes.

Also, Johnson & Johnson, Discovery Communications, LLC and Georgia Power Co. announced plans to price new notes.

Market sources forecast about $20 billion to $25 billion of deal volume for the week with some calling for as much as $30 billion of issuance.

In the secondary market, MPLX LP’s $2.25 billion of senior notes (Baa3/BBB-/BBB-) that priced in two tranches at the start of the month traded modestly better early Tuesday and significantly better than issuance.

Investment-grade secondary trading volume on Monday totaled $15.7 billion, Trace reported.

MPLX improves

MPLX’s 4.125% notes due March 1, 2027 opened stronger in secondary trading early Tuesday at 101.05 from where the notes went out in the previous session at 100.86, according to a market source.

MPLX sold $1.25 billion of the 10-year notes on Feb. 7 at 99.834 to yield 4.145%, or Treasuries plus 175 basis points.

The company’s 5.2% notes due March 1, 2047 rose to 102.48 over the morning from where the bonds last traded on Monday at 102.16.

MPLX sold $1 billion of the 30-year notes in the Feb. 7 offering at 99.304 to yield 5.246%, or Treasuries plus 220 bps.

The owner, operator and developer of crude oil pipeline and midstream assets in the United States is based in Findlay, Ohio.

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