Midday Commentary: Duke Energy, PPL Electric recent deals see strong demand in secondary

By Aleesia Forni

Virginia Beach, Va., July 9 - Following the strong demand seen for Monday's new issues from Duke Energy Indiana, Inc. and PPL Electric Utilities Corp., coupled with a positive tone to start the session, activity in the high-grade bond market picked up on Tuesday, market sources said.

Meanwhile, the Markit CDX North American Investment Grade index was 6 basis points tighter compared to Monday's close at a spread of 81 bps.

One trader saw Duke Energy Indiana's new $350 million 30-year fixed-rate notes trading 11 bps better at mid-morning.

The trader also saw PPL Electric Utilities' $350 million 4.75% 30-year bond firm 14 bps.

Duke Energy in demand

Duke Energy Indiana's $350 million of 30-year bonds, which sold at a spread of Treasuries plus 130 bps on Monday, traded 11 bps better on Tuesday.

The notes were quoted at 119 bps bid, 117 bps offered at mid-morning.

The sale also included $150 million of three-year floating-rate notes priced at par to yield Libor plus 35 bps.

The electric subsidiary of Duke Energy Corp. is based in Plainfield, Ind.

PPL notes tighten

In other secondary market action, PPL Electric Utilities' $350 million of 4.75% 30-year first mortgage bonds traded 14 bps tighter at 101 bps bid, 97 bps offered.

The company sold the notes on Monday to yield Treasuries plus 115 bps.

PPL Electric is a utility based in Allentown, Pa.

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