Morning Commentary: General Motors, Southwestern Public Service, Digital Realty on tap; GM softens

By Cristal Cody

Tupelo, Miss., Aug. 2 – At least three corporate issuers are preparing to price new investment-grade bonds on Wednesday.

General Motors Co. announced plans to sell four tranches of senior notes.

Southwestern Public Service Co. is offering 30-year first mortgage bonds.

Digital Realty Trust, LP is underway with a two-tranche notes deal.

In other deal activity, Nordic Investment Bank (Aaa/AAA) is marketing a $500 million offering of two-year global notes via BofA Merrill Lynch and RBC Capital Markets LLC.

The primary market has been active over the first two sessions with nearly $6 billion of corporate issuance on Monday and more than $10 billion of corporate and SSA supply on Tuesday.

In the secondary market early Wednesday, General Motors’ last issuance of notes (Ba1/BBB-/BBB-) that priced in February 2016 softened.

The Detroit-based automaker’s 6.6% notes due April 1, 2036 traded at 116.91, according to a market source. The notes were quoted on Tuesday at 117.57.

The issue priced in a $1.25 billion tranche on Feb. 18, 2016 at 99.92 to yield 6.606%, or a spread of Treasuries plus 400 basis points.

General Motors’ 6.75% notes due April 1, 2046 saw heavier secondary trading over the morning, a source said. The notes traded in the 118.16 area, softer than where the issue traded at 119.53 on Tuesday.

The $750 million tranche of 6.75% 30-year notes was sold in the February 2016 offering at 99.906 to yield 6.756% and a spread of Treasuries plus 415 bps.

Overall secondary trading volume was $17.62 billion on Tuesday, down slightly from $17.72 billion on Monday, according to Trace.

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