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Morning Commentary: High-grade secondary active as supply wanes; Eversource tightens
By Cristal Cody
Tupelo, Miss., Dec. 12 – Investment-grade issuance looks wrapped up for the year with no reported issuers marketing bonds on Wednesday.
Volume for the month was initially expected to reach about $25 billion to $30 billion but syndicate sources now expect little, if any, other issuance this year with more than $5 billion of bonds priced month to date.
This week, high-grade issuers priced $1.2 billion of bonds on Monday following more than $4 billion of supply last week.
Syndicate sources expected anywhere from zero to about $5 billion of deal volume for the week.
While primary action has waned, secondary volume has soared this week. On Tuesday, $25.01 billion of investment-grade issues were traded, up from $18.97 billion of secondary market volume on Monday, according to Trace data.
Eversource Energy’s $900 million of senior notes (Baa1/A/BBB+) that priced in two parts on Monday have tightened about 8 basis points in secondary trading, according to a market source.
The company’s 3.8% notes due Dec. 1, 2023, which priced in a $400 million tranche at 99.638 to yield 3.881%, or a spread of 117 bps over Treasuries, tightened to the 108 bps area.
Eversource Energy’s 4.25% notes due April 1, 2029 (Baa1/A/BBB+) also improved to the 139 bps area.
The company sold $500 million of the notes at 99.305 to yield 4.335% and a spread of Treasuries plus 147 bps.
In other secondary trading, General Motors Co.’s senior notes (Baa3/BBB/BBB) remained active early Wednesday after heavy trading on Tuesday.
The company’s 5% notes due Oct. 1, 2028 improved to 96.64 to yield 5.445% from where the issue went out on Tuesday at 94.74 to yield 5.706%, a market source said. The notes traded on Monday at 94.76 to yield 5.704%.
The Detroit-based automaker sold $750 million of the 10-year notes on Sept. 5 at 99.965 to yield 5.004%, or a spread of 210 bps over Treasuries.
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