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Morning Commentary: FHLBank prices; high-grade action light after heavy supply
By Cristal Cody
Tupelo, Miss., Feb. 14 – Federal Home Loan Bank System priced $1.25 billion of five-year Global Notes on Thursday.
Otherwise, investment-grade market activity was thin early Thursday after volume already surpassed syndicate forecasts for the week in the previous session.
Corporate issuers were quiet at the start of the day following nearly $12 billion of issuance on Wednesday.
More than $38 billion of high-grade bonds were priced over the front half of the week, helped by a $5 billion two-part offering from AT&T Inc. on Wednesday and Altria Group Inc.’s $11.5 billion seven-part deal on Tuesday.
Bonds were mostly better in secondary trading, according to market sources.
Altria’s senior notes (A3/BBB) have tightened about 5 basis points to 20 bps.
The company’s 4.4% notes due Feb. 14, 2026 were quoted stronger in the 165 bps area.
Altria sold $1.5 billion of the seven-year notes at a spread of 185 bps over Treasuries.
Boeing Co.’s $1.5 billion of senior notes (A2/A) that priced in four tranches on Wednesday tightened about 1 bp to 4 bps in secondary trading.
The company’s $400 million of 3.2% notes due March 1, 2029 were quoted about 1 bp better than where the notes priced at a spread of 67 bps over Treasuries.
Tyson Foods, Inc.’s 5.1% senior notes due Sept. 28, 2048 (Baa2/BBB/BBB) improved about 3 bps in the secondary market after the issue was reopened on Wednesday.
The company priced a $1 billion add-on to the notes at a spread of 230 bps over Treasuries.
Tyson originally sold $500 million of the notes on Sept. 25, 2018 at a Treasuries plus 190 bps spread. The total outstanding is now $1.5 billion.
High-grade secondary market volume climbed to $24.2 billion on Wednesday, according to Trace. Corporate secondary trading volume totaled $22.04 billion on Tuesday and $18.94 billion on Monday.
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