Morning Commentary: Japan Finance, Southern California Gas, Interstate Power on tap

By Cristal Cody

Tupelo, Miss., Sept. 19 – High-grade primary issuance is set to continue at a strong pace on Wednesday with no signs of fatigue following more than $100 billion of new supply month to date.

Several issuers were marketing bonds at the start of the day.

Japan Finance Organization for Municipalities is offering $1 billion of five-year senior notes with the spread set at mid-swaps plus 41 basis points, tighter than guidance in the mid-swaps plus 43 bps area.

Also in corporate supply, Southern California Gas Co., Interstate Power and Light Co. and Fortune Brands Home & Security Inc. are offering bonds.

Issuance has been strong week to date with more than $25 billion of investment-grade issues priced, including Nestle Holdings Inc.’s six-part deal on Monday, according to market sources.

Investment-grade bonds priced this week have been well received in the secondary market and are trading mostly flat to about 5 bps better than issuance, a source said.

National Retail Properties, Inc.’s $700 million of senior notes (Baa1/BBB+/BBB+) that priced on Tuesday tightened about 4 bps in secondary trading.

The Orlando-based real estate investment trust sold $400 million of 4.3% notes due Oct. 15, 2028 at a spread of 135 bps over Treasuries and $300 million of 4.8% notes due Oct. 15, 2048 at a Treasuries plus 170 bps spread.

Secondary market volume totaled $20.61 billion on Tuesday, up from $15.71 billion on Monday, according to Trace data.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.