July kicks off as slowest deal week of year; Sumitomo Mitsui, Bank of Australia notes firm

By Cristal Cody

Tupelo, Miss., July 7 – The high-grade bond markets stayed quiet on Friday following the only bond supply of the week in the previous session.

Investment-grade corporate and supranational, sovereign and agency (SSA) bond issuance has been thin in June and the first week of July marked the slowest supply week year to date, a market source said.

Three issuers tapped the primary market on Thursday, while high-grade issuers declined to price bonds during the short market session on Monday and on Wednesday following the Independence Day holiday.

Primary action is expected to pick up in July with several bond offerings in the deal pipeline, a source said.

SMBC Aviation Capital Ltd. (/BBB+/A-) plans to hold fixed-income investor calls on Monday and Tuesday ahead of a possible deal.

Additional bank and financial paper issuance is expected later in the month after the major banks exit second quarter earnings blackout periods, according to market sources.

About $15 billion to $20 billion of investment-grade supply is forecast for the week ahead, according to a syndicate source.

New issues priced traded better in the secondary market on Friday.

Sumitomo Mitsui Financial Group Inc.’s $4.25 billion of senior notes (A1/A-/A) priced in three parts firmed about 1 basis point to 2 bps.

Commonwealth Bank of Australia’s $1.5 billion offering of 3.9% notes due July 12, 2047 firmed about 1.5 bps in secondary trading.

The Markit CDX North American Investment Grade index ended on Friday mostly unchanged at a spread of 62 bps.

SMBC holds calls

SMBC Aviation Capital (/BBB+/A-) plans to hold fixed income investor calls on Monday and Tuesday ahead of a possible bond offering, according to a market source.

Citigroup Global Markets Inc., Credit Agricole Corporate and Investment Bank, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and RBC Capital Markets, LLC are arranging the calls.

SMBC Aviation Capital is a Dublin-based global aircraft leasing company.

Sumitomo improves

Sumitomo Mitsui Financial Group’s 2.784% notes due July 12, 2022 traded on Friday at 84 bps bid, 82 bps offered, according to a market source.

The company sold $2 billion of the five-year notes on Thursday at par to yield a spread of Treasuries plus 85 bps.

Sumitomo Mitsui Financial Group’s 3.364% notes due July 12, 2027 were seen at 99 bps bid, 97 bps offered in the secondary market.

The company priced $1.75 billion of the notes in Thursday’s offering at par to yield a spread of 100 bps over Treasuries.

The banking and financial company is based in Tokyo.

Bank of Australia firms

Commonwealth Bank of Australia’s 3.9% notes due July 12, 2047 firmed to 101.5 bps bid, 99.5 bps offered in the secondary market, a source said.

The bank (Aa3/AA-/AA-) priced $1.5 billion of the 30-year notes on Thursday at a spread of Treasuries plus 103 bps.

The bank and financial services company is based in Sydney.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.