Morning Commentary: Prologis offers green bonds; ServiceNow, Pioneer market notes

By Cristal Cody

Tupelo, Miss., Aug. 6 – A handful of issuers is expected to tap the high-grade primary market on Thursday, according to informed sources.

Prologis, LP is marketing two tranches of fixed-rate notes (A3/A-/A-), including green bonds. The deal includes 10-year notes with initial price talk in the Treasuries plus 105 basis points area and 30-year notes talked at the 130 bps spread area.

ServiceNow, Inc. (Baa1/BBB+) intends to price 10-year fixed-rate notes over the day. The company received its first issuer rating from Moody’s Investors Service on Thursday, while S&P Global Ratings assigned the company’s first issuer rating on Wednesday.

Initial price talk is in the Treasuries plus 112.5 bps area.

Also on Thursday, Pioneer Natural Resources Co. is offering 10-year senior notes (Baa2/BBB/BBB) initially guided to print with a spread in the 165 bps over Treasuries area.

In other primary action, Equitable Holdings, Inc. is marketing $300 million of perpetual preferred stock (Ba1/BBB-) with initial price talk at the 5.25% area.

Investment-grade issuers already have priced about $30 billion of bonds so far this week.

About $25 billion to $35 billion or more of issuance was expected by market participants for the week.

In the secondary market, high-grade issues priced this week are mixed but mostly trading better than issuance, a source said.

Activision Blizzard, Inc.’s $2 billion of senior notes (Baa1/A-) that priced in two tranches on Wednesday firmed about 7 bps to 8 bps.

The company’s 2.5% notes due Sept. 15, 2050 tightened to 122 bps bid.

Activision Blizzard sold $1.5 billion of the notes at a Treasuries plus 130 bps spread.

Market tone was mostly positive at the start of the day as participants digested economic data.

The Labor Department reported initial unemployment claims for the week ended Aug. 1 totaled a seasonally adjusted 1,186,000, down 249,000 from the previous week’s revised level and below forecasts of a 1.4 million tally.

The iShares iBoxx Investment Grade Corporate Bond ETF rose 0.45% to 139.18 in early trading.

The Pimco Investment Grade Corporate Bond index improved 0.2% to 117.77.

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