Microchip upsizes notes; high-grade volume slows; thin supply forecast

By Cristal Cody

Tupelo, Miss., Dec. 14 – Microchip Technology Inc. priced an upsized $1.4 billion of senior secured notes due Feb. 15, 2024 (Baa3//BBB-) in a Rule 144A and Regulation S deal on Monday.

The notes priced with a spread of 80 basis points over Treasuries, on the tight side of guidance and better than initial talk in the 100 bps area. The offering was upsized from $1 billion.

Supply this week is expected to be front-loaded with few high-grade issuers anticipated for the rest of December, sources said.

Although little activity is expected on Christmas Eve, already a scheduled early close for the bond markets, most federal employees will have the day off after president Donald Trump signed an executive order on Friday designating it as a federal holiday.

Syndicate sources forecast zero to up to about $10 billion of issuance for this week and the rest of the month.

High-grade companies sold more than $22 billion of issues last week, beating supply expectations of about $15 billion to $20 billion.

Month to date, more than $40 billion of investment-grade bonds have priced, also outpacing forecasts of about $25 billion to $35 billion of issuance in December.

Deal volume year to date has been staggering with more than $1.8 trillion of high-grade bonds priced, compared to $1.1 trillion of issues sold in 2019.

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