American Electric, VEON, TJX, Stryker, JAB, SEK, European Bank tap primary; Volkswagen firms

By Cristal Cody

Tupelo, Miss., Nov. 18 – Strong pricing action continued for a third consecutive day in the high-grade primary market on Wednesday.

American Electric Power Co., Inc. priced $1.5 billion of floating- and fixed-rate senior notes (Baa2/BBB+/BBB+) in three tranches.

VEON Holdings BV came by with $1.25 billion of split-rated seven-year senior notes (Ba2/BB+/BBB-/) following fixed income investor calls at the start of the week.

TJX Cos., Inc. priced $1 billion of fixed-rate senior notes (A2/A/) in two tranches during the session.

Stryker Corp. brought $600 million of three-year notes (Baa1/A-/) to the primary market.

In addition, JAB Holdings BV sold $500 million of 10-year senior notes (Baa2/BBB+/) following investor calls for the offering on Monday.

In other supply, Trustmark Corp. sold $125 million of 10-year fixed-to-floating rate subordinated notes on Wednesday.

Supply strong

The sovereign, supranational and agency space also was active over the session.

The European Bank for Reconstruction and Development (Aaa/AAA/AAA) priced $1.5 billion of five-year global notes.

Swedish Export Credit Corp. sold $700 million of floating-rate notes due May 25, 2023 (Aa1/AA+/) in an offering upsized from $500 million.

Investment-grade corporate and SSA supply totals more than $44 billion week to date.

Volume was heavy on Tuesday in both the corporate and SSA spaces with more than $18 billion of corporate bonds and $12 billion of SSA notes priced.

Investment-grade issuers sold more than $9 billion of bonds on Monday.

About $25 billion to $30 billion of high-grade supply was forecast for the week.

Volume so far this week has been led by a $4 billion fourth-tranche offering of notes from Volkswagen Group of America Finance LLC (A3/BBB+/) on Tuesday.

In the secondary market, Volkswagen’s notes tightened 4 basis points to 6 bps across the four tranches, a source said.

The company’s 1.25% notes due Nov. 24, 2025 firmed to 86 bps bid.

Volkswagen sold $1.25 billion of the five-year notes at a spread of Treasuries plus 90 bps.

Initial price talk was in the 110 bps spread area.

The Markit CDX North American Investment Grade 35 index eased less than 0.5 bp to a spread of 53.07 bps on Wednesday.

The iShares iBoxx Investment Grade Corporate Bond ETF rose 0.21% to $136.93.

The PIMCO Investment Grade Corporate Bond index closed 0.08% better at $116.08.

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