Morning Commentary: Supply slows; South Carolina Electric offers bonds; Fluor eyed

By Cristal Cody

Tupelo, Miss., Aug. 15 – Concerns over continued weakness in emerging markets may be contributing to a pullback in the investment-grade primary market on Wednesday with one reported deal being marketed at the start of the session, sources reported.

South Carolina Electric & Gas Co. is offering two tranches of first mortgage bonds.

In other high-grade market action on Wednesday, Fluor Corp. (Baa1/A-) plans to hold fixed income investor calls, a source said. BofA Merrill Lynch and BNP Paribas Securities Corp. are the arrangers.

Fluor is an Irving, Texas-based global engineering and construction firm.

High-grade deal volume has been strong week to date.

More than $23 billion of investment-grade bonds were priced over the first two sessions, compared to market forecasts of about $25 billion to $30 billion of supply for the whole week.

Issuance has been led by an $11 billion seven-tranche offering of notes from United Technologies Corp. on Monday and a $3 billion four-part bond deal from AstraZeneca plc on Tuesday.

Also on Tuesday, the primary market saw its first SSA deal of the week.

The International Bank for Reconstruction and Development, or World Bank, priced $1 billion of two-year global floating-rate notes based on the Secured Overnight Financing Rate benchmark. The new benchmark may be used to replace Libor, which will be phased out by 2021.

In secondary trading, $16.89 billion of high-grade bonds were traded on Tuesday, up from $12.95 billion of trading volume on Monday, according to Trace.

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