BlackRock, Consumers Energy, EIB price; light supply forecast; Gilead, T-Mobile mixed

By Cristal Cody

Tupelo, Miss., Sept. 25 – Investment-grade supply continued on Friday with three corporate and sovereign, supranational and agency issuers in the primary market.

BlackRock TCP Capital Corp. priced a $50 million reopening of its 3.9% senior notes due Aug. 23, 2024 (Baa3//BBB-), bringing the issue to $250 million total outstanding.

Also, Consumers Energy Co. sold $126.5 million of 50-year floating-rate first mortgage bonds (Aa3/A/A+) during the session.

The European Investment Bank (Aaa/AAA/AAA) tapped the SSA market with a $500 million add-on to its floating-rate notes due March 5, 2024 on Friday.

In other market activity, Marathon Petroleum Corp. (Baa2/BBB/BBB) is holding a virtual roadshow and fixed income investor calls that began on Tuesday, a source said.

Early Friday, the company announced the redemption of all $650 million outstanding of its 3.4% senior notes due Dec. 15, 2020 and all $300 million outstanding of its 6.25% senior notes due Oct. 15, 2022.

Corporate bond supply totaled more than $34 billion over the week following over $18 billion of issuance on Wednesday and more than $15 billion of deal volume on Tuesday. The investment-grade primary market stayed quiet on Monday, while issuance was thin on Thursday.

About $30 billion to $35 billion of investment-grade issuance was expected this week.

Looking ahead to next week, deal volume is anticipated to slow to about $20 billion to $25 billion of supply, according to syndicate sources.

October volume is expected to be lighter after record volumes this year. About $75 billion to $100 billion of issuance is predicted to print in the upcoming month, sources report.

Bonds soften

The Markit CDX North American Investment Grade 35 index remained modestly softer on Friday at a spread of 59.12 basis points.

New issues were mixed in the secondary market as tone softened and credit spreads widened over the week, a source said.

Gilead Sciences Inc.’s $7.25 billion of senior notes (A3/A) that priced in seven tranches on Wednesday were mostly softer with the short-dated tranches seen better than issuance.

The company’s 1.65% notes due Oct. 1, 2030 were quoted 5 bps wider at 105 bps bid.

Gilead Sciences sold $1 billion of the notes at a spread of 100 bps over Treasuries.

Initial price talk was in the 125 bps spread area.

The $6.25 billion of guaranteed senior notes (Baa2/BBB+) that British American Tobacco plc units priced in five tranches on Tuesday were mixed.

B.A.T Capital Corp.’s 2.726% notes due March 25, 2031 softened to 208 bps bid.

The company sold $1.25 billion of the notes at a spread of Treasuries plus 205 bps, compared to talk in the 230 bps spread area.

T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc.’s $4 billion Rule 144A and Regulation S offering of senior secured notes (Baa3/BBB-/BBB-) sold in four tranches on Tuesday also were mixed.

T-Mobile’s 2.55% notes due Feb. 15, 2031 eased to 143 bps bid.

The company priced a $750 million tap of the 2.55% notes at a Treasuries plus 140 bps spread.

Price guidance was in the Treasuries plus 165 bps area.

T-Mobile originally priced $1.75 billion of the notes on June 18 at a Treasuries plus 187.5 bps spread. The total outstanding is now $2.5 billion.

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