Morning Commentary: Piedmont Natural Gas, Sabra, Kommuninvest, World Bank, Tokyo on tap

By Cristal Cody

Tupelo, Miss., May 21 – High-grade supply is expected to continue at a strong pace over Tuesday’s session with corporate and sovereign, supranational and agency issuers in queue.

Piedmont Natural Gas is offering fixed-rate senior notes due 2029.

Sabra Health Care LP and Sabra Capital Corp., subsidiaries of Sabra Health Care REIT, Inc., intend to price five-year split-rated senior notes (Ba1/BBB-/BBB-).

In the SSA space, three issuers are marketing bond deals on Tuesday, according to market sources. The space remained quiet on Monday.

Kommuninvest I Sverige AB is offering a $1 billion Rule 144A and Regulation S offering of two-year notes. Initial price talk was in the mid-swaps plus 6 basis points area.

International Bank for Reconstruction and Development, or World Bank, plans to price a dollar-denominated offering of global notes due July 1, 2022. The notes were initially talked to price with a spread in the mid-swaps plus 3 bps area.

Also, the Tokyo Metropolitan Government intends to price a Rule 144A and Regulation S offering of dollar-denominated five-year senior notes. The notes were initially talked to price in the mid-swaps plus 47 bps area.

Deal volume is expected to continue at a steady clip through Wednesday before activity thins ahead of the early market close on Friday and long Memorial Day holiday weekend.

About $20 billion to $25 billion of issuance is forecast by syndicate sources over the short week.

More than $9 billion of high-grade notes priced on Monday, led by Wells Fargo Bank NA’s $2.1 billion two-part offering of senior bank notes.

In the secondary market on Monday, $15.18 billion of investment-grade issues were traded, according to Trace.

New issues priced on Monday were mixed in aftermarket trading, a source said.

Cargill Inc.’s $1 billion of senior notes (A2/A/A) that priced in two tranches in the previous session traded wrapped around issuance to about 0.5 bp tighter.

The Minneapolis-based food and agriculture company sold $650 million of 3.25% notes due May 23, 2029 at a spread of Treasuries plus 90 bps. The notes were flat in the secondary market.

Cargill sold $350 million of 3.875% notes due May 23, 2049 with a Treasuries plus 112.5 bps spread. The 30-year notes edged tighter in secondary trading to the 112 bps area.

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