Morning Commentary: Heavy supply on tap; American Express, Bank of America, Keurig parent eye deals

By Cristal Cody

Tupelo, Miss., May 14 – The investment-grade bond market is expected to post strong issuance on Monday and over the week.

Heading up announcements early Monday, American Express Co. revealed plans to sell two tranches of notes and Bank of America Corp. posted details for an offering of fixed-to-floating rate senior notes.

In addition, Fidelity National Information Services, Inc. plans to sell two tranches of senior notes, Canadian Pacific Railway Co. intends to price 10-year guaranteed notes and San Diego Gas & Electric Co. plans to place 30-year first mortgage bonds.

Also, Maple Parent Holdings Corp., parent of Keurig Green Mountain, Inc., announced an $8 billion offering of senior notes to help finance the acquisition of Dr Pepper Snapple Group, Inc.

Syndicate sources forecasted strong high-grade issuance in May with a significant chunk expected from mergers and acquisitions related debt financing.

Volume this week is expected by market sources to hit the $30 billion to $35 billion range.

More than $44 billion of investment-grade bonds priced in the previous week.

Some high-grade issuers also are meeting with investors this week for upcoming bond deals.

ASB Bank Ltd. (A1/AA-/AA-) kicks off its roadshow on Monday for a Rule 144A and Regulation S dollar-denominated offering of five-year notes, a source said.

The Auckland, New Zealand-based subsidiary of the Commonwealth Bank of Australia will hold the roadshow Monday through Thursday in Asia and from Thursday through May 24 in the U.S. market.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the arrangers.

Coming up on Wednesday, Vodafone Group plc (Baa1/BBB+/BBB+) will begin a roadshow for a dollar-denominated multiple-tranche offering of notes via BofA Merrill Lynch, according to a market source.

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