Morning Commentary: Alaska Air, Total, Xylem, ING, RBS, CoStar, Athene notes on tap

By Cristal Cody

Tupelo, Miss., June 24 – Several issuers expect to tap the investment-grade bond market on Wednesday, according to market sources.

Alaska Air Group, Inc. is returning to the primary market with a $208,147,000 class B tranche of pass-through enhanced equipment trust certificates (expected ratings: BBB/BBB) talked at the 8% to 8.125% area.

On Tuesday, Alaska Air priced an upsized $965,772,000 of series 2020-1 pass-through enhanced equipment trust certificates (A/A-) with a final distribution date of Aug. 15, 2027 at par to yield 4.8%.

Total Capital International is offering two tranches of guaranteed notes (Aa3/A+) on Wednesday. The deal includes notes due in 2041 talked to price at the Treasuries plus 165 basis points area and 40-year notes talked at the 200 bps to 205 bps spread area.

Xylem Inc. intends to bring two tranches of green senior notes (Baa2/BBB) to the market over the day. Initial price talk on $500 million of notes due Jan. 30, 2028 is at the Treasuries plus 175 bps area, while a $500 million offering of notes due Jan. 30, 2031 is talked at the 190 bps over Treasuries area.

ING Groep NV also is offering green bonds during the session. The company is offering six-year notes (Baa1/A+) with initial price talk at the 130 bps spread area.

In other supply, Royal Bank of Scotland Group plc plans to price reset perpetual subordinated contingent convertible additional tier 1 capital notes (Baa2/BBB/A) talked at the 6.5% area.

CoStar Group Inc. is in the day’s deal pipeline with a benchmark Rule 144A and Regulation S offering of 10-year senior notes (Baa3/BB+/BBB). Initial price talk is in the Treasuries plus 250 bps area.

Also on Tuesday, Athene Global Funding is offering $300 million of five-year senior secured notes (A/A) with price guidance in the 240 bps over Treasuries area.

Week to date, more than $8 billion of notes have priced.

About $25 billion of deal volume is expected this week with lighter issuance anticipated over the summer months.

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