Morning Commentary: Companies line up for primary; Home Depot firms; Magellan mostly flat

By Cristal Cody

Eureka Springs, Ark., Sept. 7 – Several high-grade bond issuers are expected to tap the primary market on Wednesday, while new bonds priced on Tuesday traded mostly tighter in the secondary market.

Companies including Shell International Finance BV, Public Service Electric and Gas Co., Export Development Canada and Dr Pepper Snapple Group Inc. plan new bond offerings.

Export Development Canada (Aaa/AAA) is expected to price $1 billion of three-year notes, talked at the mid-swaps plus 3 basis points area, during Wednesday’s session, according to a market source.

In the secondary market early Wednesday, Home Depot Inc.’s $2 billion two-part offering of senior notes (A2/A/A) that priced on Tuesday traded about 1 basis point to 4 bps tighter.

Magellan Midstream Partners, LP’s 4.25% senior notes due 2046, priced in a $500 million tranche on Tuesday, traded flat to 1 bp better.

The Markit CDX North American Investment Grade index opened mostly unchanged at a spread of 71 bps.

The three-month Libor yield fell 1 bp to 83 bps on Wednesday.

On Tuesday, secondary trading volume totaled $12.62 billion, according to Trace.

Home Depot improves

Home Depot’s 2.125% notes due 2026 traded flat to 1 bp tighter in the secondary market at 69 bps offered, according to a market source.

The company sold $1 billion of the 10-year notes on Tuesday at a spread of 70 bps over Treasuries.

Home Depot’s 3.5% notes due 2056 firmed to 131 bps offered in secondary trading.

Home Depot sold $1 billion of the 40-year notes in Tuesday’s offering at Treasuries plus 135 bps.

The home improvement retailer is based in Atlanta.

Magellan flat to tighter

Magellan Midstream Partners’ 4.25% notes due 2046 were quoted at 209 bps offered in the secondary market early Wednesday, a source said.

The company priced $500 million of the 30-year notes (Baa1/BBB+) on Tuesday at a spread of 210 bps over Treasuries.

The energy transportation, storage and distribution company is based in Tulsa, Okla.

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