Morning Commentary: High-grade primary action in works; PepsiCo firms; GM Financial improves

By Cristal Cody

Eureka Springs, Ark., Oct. 5 – Tanger Properties LP and Spectra Energy Partners, LP are both in the deal pipeline with investment-grade notes offerings, while new bonds priced at the start of the week traded mostly tighter in the secondary market early Wednesday.

PepsiCo Inc.’s senior notes (A1/A) brought to market on Monday traded about 1 basis point to 3 bps better than issuance.

General Motors Financial Co. Inc.’s 4% senior notes due 2026 improved about 3 bps from where the notes priced on Monday.

The Markit CDX North American Investment Grade index opened the session about 1 basis point tighter at a spread of 75 bps.

The three-month Libor yield was up 1 bp to 86 bps early Wednesday.

High-grade secondary trading volume totaled $18.1 billion on Tuesday, up from $12.4 billion traded on Monday, according to Trace.

PepsiCo modestly firms

PepsiCo’s 2.375% notes due 2026 traded about 2 bps tighter early Wednesday at 72 bps offered, according to a market source.

The company sold $1 billion of the 10-year bonds on Monday at 75 bps over Treasuries.

PepsiCo’s 3.45% notes due 2046 were quoted 2 bps better in early secondary trading at 112 bps offered.

The bonds were priced on Monday in a $1 billion tranche at a spread of Treasuries plus 115 bps.

PepsiCo is a Purchase, N.Y.-based food and beverage company.

GM Financial improves

General Motors Financial’s 4% notes due 2026 firmed about 2 bps to 237 bps offered in the secondary market, a source said.

General Motors Financial (Ba1/BBB-/BBB-) sold $750 million of the notes on Monday at Treasuries plus 240 bps.

The notes are guaranteed by operating subsidiary AmeriCredit Financial Services, Inc.

General Motors Financial is the Fort Worth, Texas-based finance subsidiary of General Motors Co.

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