Morning Commentary: Harris, Florida Power market floaters; AT&T, Time Warner notes improve

By Cristal Cody

Tupelo, Miss., Nov. 1 – At least two investment-grade issuers plan to tap the primary market on Wednesday with bond deals.

Harris Corp. is selling floating-rate notes due April 2020.

Florida Power & Light Co. is offering $750 million of three-year floating-rate notes.

Supply has been heavy over the previous two sessions. About $25 billion to $30 billion of deal volume is expected by market sources for the week.

Focus over the morning was on the Federal Reserve’s monetary policy rate decision scheduled to be released in the afternoon. Rates are expected to be left unchanged, though forecasts are growing for a December rate hike, a source said.

On Thursday, president Donald Trump is expected to give a nomination for chairman of the Federal Reserve.

Secondary trading volume jumped on Tuesday to $21.08 billion from $16.29 billion on Monday, according to Trace.

AT&T Inc.’s bonds (Baa1/BBB+/A-) traded heavily Wednesday morning, according to a market source.

The company’s 3.9% notes due Aug. 14, 2027 were last seen at 99.79, up from where the notes went out on Tuesday at 99.58.

AT&T sold $5 billion of the notes on July 27 at 99.827 to yield 3.92% and a spread of 160 basis points over Treasuries.

The company is expected to close on its $85.4 billion cash and stock acquisition of Time Warner Inc. (Baa2/BBB/BBB+) before the end of the year.

Time Warner’s 2.95% notes due July 15, 2026 improved to 96.78 in light trading over the morning from where the notes last traded on Tuesday at 95.08.

The New York-based media and entertainment company sold $800 million of the notes on May 5, 2016 at 98.70 to yield 3.1%, or a spread of Treasuries plus 135 bps.

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