Morning Commentary: Adobe, Citi, TD Bank, Couche-Tard, National Rural bonds on deck

By Cristal Cody

Tupelo, Miss., Jan. 22 – Adobe Inc. is marketing a four-tranche offering of notes in one of the biggest investment-grade bond deals expected to price on Wednesday.

The company held fixed income investor calls on Tuesday for the offering, a source said.

A tranche of three-year notes is initially talked to price with a spread in the Treasuries plus 50 basis points area, while a tranche of five-year notes is talked to print with a Treasuries plus 60 bps area spread.

The deal includes a seven-year tranche talked to price in the 70 bps over Treasuries area and a tranche of 10-year notes initially guided to price in the 80 bps spread area.

Bank and financial supply also continues on Wednesday with deals from Citigroup Inc. and Toronto-Dominion Bank, according to a market source.

Citigroup is marketing 11-year fixed-to-floating rate notes with initial talk in the Treasuries plus 105 bps area.

TD bank intends to price three-year floating-rate senior medium-term notes. The notes are initially talked to price in the SOFR plus low 60 bps area.

Also on Wednesday, Alimentation Couche-Tard Inc. plans to sell two tranches of dollar-denominated senior notes in a Rule 144A and Regulation S offering.

A tranche of notes due Jan. 25, 2030 is initially talked to price in the Treasuries plus 155 bps area.

Initial price talk on a tranche of bonds due Jan. 25, 2050 is in the 195 bps over Treasuries area.

Meanwhile, National Rural Utilities Cooperative Finance Corp. plans to sell two tranches of registered collateral trust bonds, a market source said.

The company is marketing two-year bonds with initial spread talk in the Treasuries plus 40 bps area and 10-year bonds initially talked to price with a spread in the 80 bps to 85 bps over Treasuries area.

In other supply expected over the session, the European Investment Bank launched a $1 billion offering of floating-rate notes due Jan. 30, 2023 at SOFR plus 25 bps, 2 bps tighter than initial talk.

Investment-grade deal volume is expected to total in the $20 billion to $25 billion area over the holiday-shortened week.

On Tuesday, issuers included Bank of New York Mellon Corp., Canadian Imperial Bank of Commerce, Nationwide Building Society, State Street Corp., Target Corp. and Waste Connections, Inc.

In the secondary market, the new issues traded about 1 bp to 3 bps tighter, a source said.

Canadian Imperial Bank of Commerce’s $1 billion of 2.25% senior notes due Jan. 28, 2025 (A2/BBB+/AA-) that priced on Tuesday at a spread of Treasuries plus 68 bps tightened about 2 bps in secondary trading.

Initial price talk was in the Treasuries plus low 80 bps area.

The diversified financial institution is based in Toronto.

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