High-grade issuance quiet; Eversource Energy tightens; Bayer, Dow Chemical notes soften

By Cristal Cody

Tupelo, Miss., Dec. 11 – The high-grade primary market stayed quiet on Tuesday with market sources expecting the bulk of issuance to have wrapped up for the year.

Other than a few small deals here and there, issuers are reportedly waiting until 2019 to print.

On Monday, Eversource Energy and Mercy Health priced a combined $1.2 billion of investment-grade notes.

Syndicate sources expected zero to about $5 billion of issuance for the week in front of the year-end holiday closures.

The Markit CDX North American Investment Grade 31 index firmed about 2 basis points to close the day at a spread of 80 bps.

In the secondary market, Eversource Energy’s new 4.25% notes due April 1, 2029 (Baa1/A/BBB+) tightened 5 bps, a source said.

The company sold $500 million of the notes on Monday at a spread of Treasuries plus 147 bps. Price guidance was in the Treasuries plus 150 bps area, plus or minus 3 bps. The notes were initially talked in the 155 bps over Treasuries spread area.

Bayer AG’s notes that priced earlier in the year through issuer Bayer US Finance II LLC traded about 5 bps weaker to as much as 12 bps tighter on Tuesday. The company’s notes have widened more than 40 bps since pricing in June.

Dow Chemical Co.’s 4.8% senior notes due Nov. 30, 2028 softened 1 bp during the session and more than 10 bps from where the issue priced last month.

Bayer notes mixed

Bayer’s 3.875% notes due Dec. 15, 2023 eased 5 bps to 172 bps bid in secondary trading on Tuesday, a market source said.

Bayer US Finance II (Baa1/BBB/A-) sold $2.25 billion of the five-year notes on June 18 at a spread of 115 bps over Treasuries.

The company’s 4.375% notes due Dec. 15, 2028 tightened to 199 bps bid on Tuesday from 211 bps bid on Monday.

Bayer priced the $3.5 billion tranche of 10-year notes in the June 18 offering at a Treasuries plus 155 bps spread.

The health care and agriculture products company is based in Leverkusen, Germany.

Dow Chemical eases

Dow Chemical’s 4.8% notes due Nov. 30, 2028 eased 1 bp to 186 bps bid, according to a market source on Tuesday.

The company sold $600 million of the notes (Baa2/BBB/BBB+) on Nov. 28 at a Treasuries plus 175 bps spread.

Dow Chemical holding company DowDuPont Inc. plans to spin off Dow Chemical and Corteva Inc. in 2019.

Dow Chemical is a specialty chemicals company based in Midland, Mich.

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