Morning Commentary: High-grade bond offering pipeline fills; Discovery mixed; Chevron better

By Cristal Cody

Tupelo, Miss., March 6 – Several investment-grade issuers are preparing to price new bonds during Monday’s session.

Burlington Northern Santa Fe, LLC, Capital One Financial Corp., Great Plains Energy Inc., Enable Midstream Partners, LP, Ameris Bancorp and Nordstrom, Inc. are in the deal pipeline.

Volume is expected to be heavy over the week with as much as $50 billion of supply forecast from corporate and SSA issuers.

The three-month Libor yield was unchanged at 1.1% early Monday, a market source said.

Discovery Communications, LLC’s senior notes (Baa3/BBB-/BBB-) that priced in the previous week were mixed in early secondary trading.

Chevron Corp.’s senior notes (Aa2/AA-) that priced on Tuesday improved in the secondary market.

On Friday, $21.3 billion of high-grade bonds were traded, according to Trace.

Discovery mixed

Discovery Communications’ 3.8% notes due March 13, 2024 softened to 99.37 early Monday from 99.54 on Friday in the secondary market, a source said.

The company priced $450 million of the notes on Tuesday at 99.811 to yield 3.831% and a spread of Treasuries plus 165 basis points.

Discovery Communications’ reopened 4.9% notes due March 11, 2026 opened better at 104.55 from 104.27 on Friday.

Discovery Communications priced a $200 million add-on to the notes on Tuesday at 105.038 to yield 4.206%, or a spread of 185 bps over Treasuries.

The company originally sold $500 million of the notes on March 8, 2016 at 99.633 to yield 4.947% and a spread of 312.5 bps over Treasuries.

The global media company is based in Silver Spring, Md.

Chevron improves

Chevron’s 1.686% notes due Feb. 28, 2019 edged up to 100.03 from where the bonds last traded on Friday at 99.96, according to a market source.

The company priced $550 million of the two-year notes on Tuesday at par to yield Treasuries plus 45 bps.

Chevron’s 2.895% notes due March 3, 2024 were better in early secondary trading at 99.42 from where the notes last traded on Friday at 99.27.

The company priced $1 billion of the seven-year notes on Tuesday at par to yield 70 bps over Treasuries.

The petroleum, chemical, mining, power and energy company is based in San Ramon, Calif.

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