Morning Commentary: Air Lease, Telefonica, Brixmor to price; Chevron mixed; Discovery softens

By Cristal Cody

Tupelo, Miss., March 1 – The high-grade bond market is set for a third straight day of busy pricing action with several issuers announcing plans early Wednesday to tap the primary market.

Issuers including Air Lease Corp., Telefonica Emisiones, SAU, Brixmor Operating Partnership LP and Mercury General Corp. intend to price senior notes.

More than $25 billion of bonds priced over the previous two sessions.

About $20 billion to $25 billion of new issuance was forecast for the week.

In the secondary market, Chevron Corp.’s $4 billion seven-part offering of senior notes (Aa2/AA-) that priced on Tuesday were mixed early Wednesday.

Discovery Communications, LLC’s $650 million of senior notes (Baa3/BBB-/BBB-) that priced in two parts on Tuesday traded softer at the start of the session.

Investment-grade secondary trading volume climbed to $22.7 billion on Tuesday from $15.7 billion on Monday, Trace reported.

Chevron mixed

Chevron’s 1.686% notes due Feb. 28, 2019 improved to 100.08 in early secondary trading on Wednesday, according to a market source.

The company priced $550 million of the two-year notes on Tuesday at par to yield a spread of Treasuries plus 45 basis points.

Chevron’s 2.895% notes due March 3, 2024 weakened to 99.62 in secondary trading on Wednesday.

The company priced $1 billion of the seven-year notes on Tuesday at par to yield a spread of 70 bps over Treasuries.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

Discovery softens

Discovery Communications’ 3.8% notes due March 13, 2024 opened softer at 99.42 in the secondary market, a source said.

The company priced $450 million of the notes on Tuesday at 99.811 to yield 3.831%, or Treasuries plus 165 bps.

Discovery Communications’ reopened 4.9% notes due March 11, 2026 slipped to 104.49 in secondary trading.

Discovery Communications priced a $200 million add-on to the notes on Tuesday at 105.038 to yield 4.206%, or a spread of 185 bps over Treasuries.

The company originally sold $500 million of the notes on March 8, 2016 at 99.633 to yield 4.947% and a spread of 312.5 bps over Treasuries.

The global media company is based in Silver Spring, Md.

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