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Morning Commentary: CPPIB offers notes in otherwise thin supply; Energy Transfer soft
By Cristal Cody
Tupelo, Miss., Feb. 26 – Investment-grade supply continues to remain thin week to date with just one reported issuer in the primary market so far and one expected to print on Wednesday.
CPPIB Capital Inc. (Aaa/AAA/AAA) is offering $1 billion of five-year notes in a Rule 144A and Regulation S deal.
The notes due March 4, 2025 are initially talked to price at the mid-swaps plus 16 basis points area.
On Tuesday, Fulton Financial Corp. priced the week’s only bond deal when it sold $375 million of fixed-to-floating rate subordinated notes in two tranches.
Fannie Mae announced Tuesday that it would skip issuing any Benchmark Notes on the scheduled date. Fannie Mae’s next scheduled date to offer Benchmark Notes is on March 3.
Issuers have pulled back from tapping the primary market amid increasing fears of a coronavirus pandemic as the number of infections globally continues to rise.
About $25 billion to $30 billion of investment-grade deal volume was expected this week.
The high-grade secondary market has been busier.
Energy Transfer Operating LP’s 3.75% notes due May 15, 2030 (Baa3/BBB-/BBB-) are among the most actively traded high-grade corporate issues but have weakened since Friday, sources said.
The notes were quoted at 102.52 early Wednesday, down from 102.97 on Tuesday and from 103.92 on Friday.
On Tuesday, the notes headed out 7 basis points wider.
The Dallas-based natural gas midstream and intrastate transportation and storage company sold $1.5 billion of the long 10-year notes on Jan. 7 at 99.843 to yield 3.769% and a Treasuries plus 255 bps spread.
Tuesday’s session saw $23.7 billion of bonds traded, up from $15.11 billion on Monday, according to Trace data.
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