Morning Commentary: Investment-grade supply thin; Fulton Financial offers two tranches

By Cristal Cody

Tupelo, Miss., Feb. 24 – Just one reported issuer offered bonds in the high-grade primary market early Monday.

Fulton Financial Corp. plans to price $250 million of fixed-to-floating rate subordinated notes due 2030 and 2035 (Baa1//DBRS: BBB).

Strong deal volume is expected this week, though, with syndicate sources forecasting about $25 billion to $30 billion of supply.

More than $32 billion of investment-grade corporate bonds were sold last week.

In the secondary market, Kraft Heinz Foods Co.’s senior notes (Baa3/BB+/BB+) were mixed in active trading early Monday, a source said.

The company’s notes have traded heavily since the issuer was downgraded to junk by S&P Global Ratings and Fitch Ratings on Valentine’s Day.

Kraft Heinz Foods’ 4.625% notes due Jan. 30, 2029 were quoted at 108.94, up from 108.85 on Friday and improved from where the issue traded down nearly 2 points on Feb. 14 at 107.65.

The Chicago-based food company sold $1.1 billion of the notes on June 4, 2018 at 99.41 to yield 4.7% and a spread of 175 basis points over Treasuries.

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