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Morning Commentary: High-grade supply revs up; Berkshire, Procter & Gamble on deck
By Cristal Cody
Tupelo, Miss., Oct. 27 – Investment-grade bond supply revved up on Tuesday with several issuers in the primary market at the start of the day, sources report.
Berkshire Hathaway Inc. is marketing three tranches of senior notes (A3/A-/BBB+) that includes notes due May 15, 2025 talked to price with a spread in the Treasuries plus 65 basis points area, notes due May 15, 2031 guided at the 115 bps spread area and notes due May 15, 2051 that are talked to price in the 150 bps over Treasuries area.
Procter & Gamble Co. plans to price two tranches of fixed-rate senior notes (Aa3/AA-) over the session.
A tranche of five-year notes is talked to price at the Treasuries plus 40 bps to 45 bps spread area, while a 10-year note is talked at the 70 bps spread area.
In other supply expected, Tractor Supply Co. is offering $500 million of 10-year fixed-rate notes (Baa1/BBB) that are talked to price at the Treasuries plus 145 bps area.
Also, Acuity Brands Lighting, Inc. is marketing $400 million 10-year guaranteed fixed-rate notes. The issue is guided to price at the Treasuries plus 150 bps to 162.5 bps area.
Genuine Parts Co. is offering 10-year fixed-rate notes over the day. Initial price talk is the Treasuries plus 150 bps area.
In other primary action, Banc of California, Inc. is marketing fixed-to-floating rate subordinated notes due 2030 (Kroll: BBB-) on Tuesday.
In addition, Bank of America Corp. plans to price an offering of $25-par series NN perpetual non-cumulative preferred stock (Baa3/BBB-/BBB) during the session.
Initial price talk is in the 4.625% area.
Meanwhile, in sovereign, supranational and agency activity, Kommuninvest I Sverige AB (Aaa/AAA) launched a $1.25 billion Rule 144A and Regulation S offering of notes due July 20, 2022 on Tuesday at mid-swaps plus 2 bps.
Initial price talk was in the mid-swaps plus 5 bps area.
About $15 billion of high-grade bond supply is anticipated this week, according to syndicate sources.
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