High-grade issuance thins after strong supply; Realty Income prices

By Cristal Cody

Tupelo, Miss., Dec. 9 – High-grade volume stayed light over Wednesday’s session with just one reported registered issuer in the primary market.

Realty Income Corp. priced $725 million of senior notes (A3/A-/) in two tranches during the session.

The deal included a $325 million tranche of notes due March 15, 2026 and $400 million of notes due March 15, 2033.

Elsewhere, the Federal Home Loan Bank System announced it skipped issuing a Global note on Wednesday. The agency’s next Global note funding opportunity will be on Jan. 20.

Week-to-date investment-grade volume totals more than $20 billion.

About $15 billion to $20 billion of high-grade bonds were expected to price over the week, according to syndicate sources.

Supply was strong over the first two sessions with $11.45 billion of notes from issuers including CVS Health Corp., Morgan Stanley and Nasdaq, Inc. on Monday and continued with more than $7 billion of volume on Tuesday, led by offerings from Charles Schwab Corp.

Investment-grade deal volume is expected to decline significantly headed into the holidays, sources report. About $25 billion to $35 billion or more of corporate bonds were forecast to price in December. Month to date, about $40 billion of investment-grade bonds have already priced.

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