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PECO, PPL Electric price; Santander, CBL drop deal plans; Glencore, Alcoa plummet
By Aleesia Forni and Stephanie N. Rotondo
Virginia Beach, Sept. 28 – PECO Energy Co. and PPL Electric Utilities Corp. priced new bonds on Monday, while two potential issuers pulled new deal plans during a rocky session for the investment-grade bond market.
Volatile market conditions caused both Santander Holdings USA Inc. and CBL & Associates Properties Inc. to drop plans for new senior notes offerings during the session.
The primary market did see utility companies PPL Electric and PECO Energy each price $350 million mortgage bond offerings between 12 basis points to 15 bps tighter than initial talk.
PECO attracted an order book that was more than two times oversubscribed, while PPL Electric garnered a book of more than $1 billion.
Also on Monday, WEA Finance LLC sold $1 billion of five-year senior notes after dropping plans for a 10-year tranche at the deal’s guidance stage, and Landeskreditbank Baden-Wurttemberg-Forderbank (L-Bank) priced $500 million of two-year floaters.
Investment-grade corporate bonds traded mostly flat to weaker, while credit spreads widened over the day.
But there were a couple of notable casualties.
One such name was Glencore plc, whose stock hit a new low Monday amid a commodity sell-off. A trader said its bonds were off 8 to 10 points on the day.
Alcoa Inc. paper also plunged. The aluminum producer, which has a split rating, investment grade from Standard & Poor’s, junk from Moody’s Investors Service, announced Monday that it plans to split itself into two companies.
As a result, those bonds were off “some 10 to 12 points,” according to a trader.
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