Morning Commentary: UPS reopening on tap; KeyBank notes tighten; credit spreads stable

By Cristal Cody

Eureka Springs, Ark., Aug. 19 – High-grade primary action on Friday is expected to include a reopened bond issue from the United Parcel Service.

UPS plans to tap its floating-rate senior notes due March 15, 2066, according to a form 424B5 filing with the Securities and Exchange Commission on Friday.

UBS Securities LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the bookrunners.

In the secondary market, KeyBank NA’s 1.6% senior bank notes due 2019 traded about 2 basis points tighter early Friday.

The Markit CDX North American Investment Grade index opened mostly flat at a spread of 70 bps.

The three-month Libor yield was up 1 bp to 81 bps early Friday.

On Thursday, $15.04 billion of high-grade bonds were traded, compared to $16.9 billion on Wednesday, $15.68 billion on Tuesday and $11.53 billion on Monday, according to Trace.

KeyBank firms

KeyBank’s 1.6% senior bank notes due 2019 traded better at 68 bps offered early Friday, according to a market source.

The notes were seen on Thursday at 72 bps bid, 70 bps offered.

KeyBank priced $500 million of the notes (A3/A-/A-) on Wednesday at a spread of Treasuries plus 75 bps.

The regional bank is based in Cleveland.

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