Morning Commentary: Butterfield offers notes; Kommuninvest tightens spread; Keurig improves

By Cristal Cody

Tupelo, Miss., May 16 – The Bank of N.T. Butterfield & Son Ltd. is marketing 10-year fixed-to-floating rate subordinated notes in the high-grade primary market on Wednesday.

In other issuance expected during the session, Kommuninvest I Sverige AB plans to sell $1 billion of notes due March 1, 2021. The spread on the notes was set at mid-swaps plus 6 basis points, tighter than initial guidance in the mid-swaps plus 8 bps area.

Supply was heavy in the first two sessions of the week with more than $17 billion of bonds priced on Monday and more than $8 billion of issues sold on Tuesday.

In other activity on Wednesday, Vodafone Group plc will start a roadshow for a dollar-denominated multiple-tranche offering of notes. BofA Merrill Lynch is the arranger.

Other issuers conducting roadshows or fixed income investor calls this week include Eni SpA, ASB Bank Ltd. and Air Lease Corp.

About $30 billion to $35 billion of investment-grade bond volume is forecast by market sources for the week.

High-grade secondary market volume rose to $19.86 billion on Tuesday from $15.99 billion on Monday, according to Trace.

The $8 billion of notes priced in six tranches on Monday to fund the merger with Keurig Green Mountain Inc. and Dr Pepper Snapple Group, Inc. are trading about 4 bps to 7 bps tighter than issuance in the secondary market, a source said. Maple Escrow Subsidiary, Inc., a subsidiary of the parent company of Keurig Green Mountain, issued the notes.

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