Morning Commentary: High-grade primary market quiet; Hyundai holds roadshow; Starbucks mixed

By Cristal Cody

Tupelo, Miss., May 29 – Light primary action is expected in the high-grade bond market on Tuesday following the Memorial Day holiday.

The deal pipeline remained quiet at the start of the day with no reported issuers.

Syndicate sources expect about $20 billion of new bonds to price over the week.

Hyundai Capital America (Baa1/A-) is holding a roadshow this week in the United States, Europe and Asia for a Rule 144A and Regulation S dollar-denominated note offering, a source said.

The Irvine, Calif.-based auto financing arm of the Hyundai Motor Co. will hold the roadshow through Friday.

BofA Merrill Lynch, Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Societe Generale CIB and RBC Capital Markets, LLC are the arrangers.

In other activity, Starbucks Corp.’s senior notes (A3/A-/A-) were mixed in secondary trading over the morning, a source said.

The company’s 3.1% notes due March 1, 2023 rose to 99.66 in mid-morning trading from 99.05 on Friday.

Starbucks sold $1 billion of the five-year notes at 99.968 to yield 3.107% and a spread of 50 basis points over Treasuries on Feb. 26.

The company’s $600 million of 3.5% notes due March 1, 2028, which priced in the Feb. 26 sale at 99.757 to yield 3.529%, or a Treasuries plus 67 bps spread, softened to 99.03 early Tuesday from 99.32 on Friday.

The Seattle-based specialty coffee retailer is closing all of its 8,000 stores early on Tuesday for diversity training.

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