Morning Commentary: High-grade energy issuers line up to tap primary; Bank of America firms

By Cristal Cody

Eureka Springs, Ark., Nov. 10 – After a two-day break due to the U.S. elections, several investment-grade issuers are set to tap the primary market on Thursday on the last session of the holiday-shortened week.

Consolidated Edison Co. of New York, Inc. plans a two-part debentures offering, Virginia Electric and Power Co. is marketing two tranches of senior notes and Southern Power Co. intends to bring three tranches of senior notes.

President-elect Donald Trump is seen as supporting the energy industry, and on Wednesday energy bonds traded mostly stronger in the secondary market, sources reported.

Bank and financial paper also continues to improve, while Treasuries remain weak post-election.

Bank of America Corp.’s 3.248% senior notes due 2027 were quoted 10 basis points better in secondary trading early Thursday.

Secondary trading was robust over Wednesday’s session with $20.18 billion of volume, according to Trace.

In the previous sessions, $14.9 billion of high-grade issues traded on Tuesday and $14 billion of bonds traded on Monday.

Bank of America tightens

Bank of America’s 3.248% notes due 2027 traded 10 bps better at 132 bps offered in the secondary market, a source said.

The bank sold $2.5 billion of the notes (Baa1/BBB+/A) on Oct. 18 at a spread of 150 bps over Treasuries.

The financial services company is based in Charlotte, N.C.

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