High-grade issuers find short windows in volatile week; new paper mixed in secondary market

By Cristal Cody

Tupelo, Miss., May 13 – Investment-grade issuers saw windows of opportunity in only two sessions during the week but pounced on those days, bringing over $20 billion of bonds on Tuesday and Thursday.

Companies in the high-grade space stayed to the sidelines on Monday, Wednesday and Friday as volatility and weak economic data rattled markets, sources said.

Several issuers stood down on Wednesday after the Bureau of Labor of Statistics reported the Consumer Price Index rose 0.3% in April, higher than market forecasts of a 0.2% bump.

The week’s biggest deal was an $8 billion six-part offering on Thursday from Intercontinental Exchange Inc.

Volume has been fairly light so far in May following about $19 billion of bonds sold in the prior week.

The deal pipeline is likely to remain steady in the May 16 week with about $30 billion of expected volume, depending on market tone, sources said.

Week’s issuance

New issues mostly priced tighter than initial talk during the week but were ending the week mixed in the secondary market, sources said.

Tuesday’s session saw over $9 billion of issuance led by deals that included Caterpillar Financial Services Corp.’s $1.75 billion two-tranche offering of notes (A2/A) that priced 20 basis points tighter than initial talk, Albemarle Corp.’s $1.7 billion three-part offering of notes (Baa3/BBB) that came 5 bps to 10 bps better than talk and $1.5 billion of notes (Baa3/BBB-) from Vistra Operations Co. LLC that priced over 10 bps better than initial talk.

Albemarle’s three tranches widened about 7 bps to over 15 bps in secondary trading.

The company’s $600 million offering of 5.05% notes due 2032 softened to 230 bps bid, 225 bps offered from where the issue priced at a spread of 210 bps over Treasuries, a market source said.

Public Service Co. of Colorado’s $700 million two-part offering of notes (A1/A) on Tuesday tightened about 30 bps to 35 bps from initial talk but were moving wider in the secondary market, a source said.

The company’s $300 million tranche of 4.1% notes due 2032 was talked at the Treasuries plus 150 bps area and came in to a 120 bps spread by the print.

The issue eased to 121 bps bid, 117 bps offered.

Issues priced Thursday were seen mostly tighter going into the weekend, a source said.

Intercontinental Exchange led the day’s $11.5 billion of supply with an $8 billion six-part offering of senior notes (A3/A-) that priced about 20 bps to 25 bps tighter than guidance.

The notes were trading Friday about 3 bps to over 10 bps better, a source said.

Intercontinental Exchange’s $1.5 billion tranche of 4% notes due 2027 were 4 bps tighter than issuance at 121 bps bid.

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