Morning Commentary: Santander UK, Santander UK Group offer notes; Wal-Mart notes mixed in trading

By Cristal Cody

Tupelo, Miss., Oct. 27 – Deal action in the high-grade bond market is set to continue through Friday with two transactions in the works.

Santander UK Group Holdings plc announced plans to price fixed-to-floating rate notes due 2028, while Santander UK plc announced an offering of floating-rate notes due 2020.

Supply over the week has been stronger than market sources expected with more than $28 billion of issuance through Thursday. The market initially expected $20 billion of supply.

In the secondary market, Wal-Mart Stores, Inc.’s notes that priced in a $6 billion six-tranche offering on Oct. 11 have been active over the week, a source said.

Wal-Mart’s 2.35% notes due Dec. 15, 2022 were unchanged early Friday at 99.99.

Wal-Mart (Aa2/AA/AA) sold $1.25 billion of the five-year notes at 99.992 to yield 2.351% and a spread of Treasuries plus 40 basis points.

Wal-Mart’s 2.65% notes due Dec. 15, 2024 were slightly better at 99.58 over the morning after last trading on Thursday at 99.46.

The Bentonville, Ark.-based discount retailer sold $1 billion of the seven-year bonds at 99.971 to yield 2.654%, or a 48 bps spread over Treasuries.

On Thursday, $17.87 billion of high-grade bonds were traded, compared to $21.85 billion on Wednesday, $23.41 billion on Tuesday and $15.52 billion on Monday, according to Trace.

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