Morning Commentary: High-grade supply quiets; Synovus Bank eyes primary; bonds firm

By Cristal Cody

Tupelo, Miss., Oct. 22 – The investment-grade primary market stayed quiet at the start of Thursday’s session with no reported issuers offering bonds.

In other activity, Synovus Financial Corp. subsidiary Synovus Bank (Baa2/BBB/BBB) is holding fixed income investor calls on Thursday for a possible deal, a source said.

BofA Securities, Inc., Morgan Stanley & Co. LLC and Piper Sandler & Co. are the arrangers.

High-grade deal volume week to date includes about $25 billion of corporate and sovereign, supranational and agency issuance.

Corporate issuers have priced about $15 billion of deals this week, in line with the $15 billion of supply expected by market participants for the week.

T-Mobile, Ross improve

In the secondary market, new issues are mostly trading tighter than issuance, a source said.

T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc.’s $4.75 billion Rule 144A and Regulation S four-tranche offering of senior secured notes (Baa3/BBB-/BBB-) that priced on Monday remain about 3 basis points to 10 bps better than pricing.

T-Mobile’s 3.6% notes due Nov. 15, 2060 were quoted steady at 200 bps bid.

The company sold $1 billion of the 40-year notes on Monday at a Treasuries plus 205 bps spread.

Initial talk was in the 230 bps spread area.

Ross Stores, Inc.’s $1 billion of senior notes (A2/BBB+) that priced in two tranches on Monday firmed about 1 bp to 2 bps in the secondary market.

The retailer’s 0.875% notes due April 15, 2026 improved about 2 bps to 63 bps bid.

The notes priced in a $500 million tranche at a spread of Treasuries plus 65 bps.

Initial price talk was in the Treasuries plus 100 bps area.

The secondary market saw $21.62 billion of high-grade corporate bonds trade on Wednesday, along with $23.6 billion on Tuesday and $15.36 billion on Monday, according to Trace.

Market tone was mixed early in the session on Thursday.

The Pimco Investment Grade Corporate Bond index rose 0.10% to 114.67.

The iShares iBoxx Investment Grade Corporate Bond ETF declined 0.21% to $134.30.

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