Morning Commentary: Activision Blizzard, BP, Tucson Electric, Piedmont, BNP on tap

By Cristal Cody

Tupelo, Miss., Aug. 5 – The high-grade primary market is expected to remain busy on Wednesday with a number of deals being offered, sources report.

Activision Blizzard, Inc. is marketing two tranches of fixed-rate senior notes (Baa2/BBB), including 10-year notes initially talked to price at the Treasuries plus 120 basis points area and a 30-year issue talked to print in the 155 bps spread area.

BP Capital Markets America Inc. (A1/A-) is offering two tranches of senior notes.

The deal includes 10-year notes talked to price with a spread in the Treasuries plus 150 bps area and a tranche of notes due Nov. 10, 2050 talked to price at the Treasuries plus 170 bps to 175 bps area.

Meanwhile, Tucson Electric Power Co. is offering green senior notes (A3/A-) on Wednesday after holding fixed income investor calls on Tuesday.

Also, Piedmont Operating Partnership, LP (Baa2/BBB) plans to price $300 million of 10-year green bonds on Wednesday following fixed income investor calls in the previous session. The company is marketing 10-year senior notes with initial price guidance at the Treasuries plus 275 bps area.

Financial supply also is scheduled over the day.

BNP Paribas SA plans to bring an offering of subordinated notes due Aug. 12, 2035 (Baa2/A-/BBB) to the primary market.

Initial price talk is in the Treasuries plus 235 bps area.

Barclays plc is marketing split-rated fixed-rate resetting perpetual contingent convertible securities (Ba2/BBB-). Initial talk was in the 6.625% area with guidance revised to the 6.375% area.

In other deals expected over the day, Aircastle Ltd. is marketing five-year senior notes (Baa3/BBB-/BBB) following fixed income investor calls on Tuesday.

Initial price talk is in the Treasuries plus 575 bps area.

About $25 billion to $35 billion or more of issuance is expected by market participants this week.

High-grade supply already totals more than $21 billion week to date, led by a $10 billion six-tranche offering of senior notes (Aa2/AA+) from Google owner Alphabet Inc. on Monday.

Alphabet mixed

New issues were mixed in the secondary market, a source said.

Alphabet’s notes are trading flat to about 4 bps tighter than issuance.

Market tone was soft at the start of the day.

The Pimco Investment Grade Corporate Bond index was down 0.52% to 117.39.

The iShares iBoxx Investment Grade Corporate Bond ETF slipped 0.17% to 138.51.

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