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Host Hotels, Globe Life tap notes; supply thins; August closes out with record volume
By Cristal Cody
Tupelo, Miss., Aug. 31 – A couple of high-grade issuers tapped existing bonds on Monday as August closed with another record month of volume.
Host Hotels & Resorts, LP priced a $150 million reopening of its 3.5% 10-year green senior notes (Baa3/BBB-/BBB-) at a spread of Treasuries plus 300 basis points, unchanged from where the issue was first sold in a $600 million offering on Aug. 11. The total outstanding is now $750 million.
Also on Monday, Globe Life Inc. priced a $50 million add-on to its 2.15% senior notes due Aug. 15, 2030 (Baa1/A/BBB+) at a spread of Treasuries plus 147 bps, 3 bps tighter than where the issue first priced on Aug. 18 in a $350 million deal. The total outstanding is now $400 million.
In other activity on Monday, Renasant Corp. priced $100 million of 4.5% fixed-to-floating-rate subordinated notes due in 2035 (Kroll: BBB).
Light supply is expected this week ahead of the Labor Day holiday with up to about $5 billion to as much as $15 billion of deal volume anticipated, market sources report.
Deal volume hit a record $150.51 billion total in August from 175 high-grade issues, nearly double the $80.97 billion of volume seen in the same month last year from 111 issues, according to Prospect News data.
Supply has seen historic levels since March as companies built up heavy cash reserves amidst the pandemic, sources note.
Year to date, high-grade volume totals $1.47 trillion from 1,505 issues, compared to $805.66 billion priced in 925 tranches in the same period in 2019.
Looking toward September, syndicate sources forecast about $110 billion to as much as $165 billion of supply for the month.
The Markit CDX North American Investment Grade 33 index firmed nearly 2 basis points from Friday to close at a spread of 65.07 bps on Monday.
The iShares iBoxx Investment Grade Corporate Bond ETF finished the day 0.44% better at 135.60.
The PIMCO Investment Grade Corporate Bond index closed up 0.54% to 115.66.
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