Abbott, Canadian Resources, Duke Realty price; Arch Capital on tap; credit spreads improve

By Cristal Cody

Tupelo, Miss., June 22 – A handful of high-grade corporate issuers priced $2.75 billion of bonds in the primary market on Monday.

Abbott Laboratories sold $1.3 billion of senior notes (A3/A-/) in two tranches 30 basis points tighter than initial talk.

Canadian Natural Resources Ltd. (Baa2/BBB/) priced $1.1 billion of senior notes in two parts, also 30 bps better than initial talk.

Duke Realty LP sold $350 million of 10-year senior notes (Baa1/BBB+/) in an offering upsized from $300 million.

Meanwhile, Brookfield Infrastructure Partners, LP postponed $150 million of $25-par preferred limited partnership units (/BBB-/) due to market conditions on Monday, a source said. Initial guidance was in the 5.375% to 5.5% area.

Also on Monday, the Federal Home Loan Bank System announced it would skip issuing a Global note during the session with the next Global funding opportunity scheduled for July 15.

In other activity, several issuers are holding fixed income investor calls for likely bond deals, a source said.

Arch Capital Group Ltd. held investor calls over the day for a registered offering of senior notes (Baa1/A-/BBB+) expected to price in 10-year and 30-year tranches.

Deal volume is anticipated to slow this week to about $25 billion as summer vacations kick off.

Issuers beat market forecasts last week with nearly $60 billion of total high-grade supply, outpacing the $20 billion to as much as $40 billion expected for the week.

S&P Global Ratings said in a report on Monday that it “expects social bonds to emerge as the fastest-growing segment of the sustainable debt market in 2020; in fact, issuance has more than quadrupled so far this year.”

The supply “stands in sharp contrast to the rest of the global fixed income market, for which we expect issuance volumes to decline 9% this year,” S&P said.

On Thursday, Ford Foundation priced $1 billion of taxable social bonds (Aaa/AAA) in two tranches.

“Corporations and financial institutions will become more active in the social bond market as the pandemic accelerates private issuers' interest in social considerations,” S&P sustainable finance analyst Lori Shapiro said in the report.

High-grade credit spreads improved from Friday by nearly 2 bps.

The Markit CDX North American Investment Grade 33 index closed the day at a spread of 76.17 bps.

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