Morning Commentary: High-grade volume heavy; Upjohn, NetApp, GM, Barclays on deck

By Cristal Cody

Tupelo, Miss., June 17 – Investment-grade supply is set to remain elevated on Wednesday with more than a dozen issuers offering bonds, sources report.

Upjohn Inc. is expected to lead deal volume with a six-tranche offering of senior notes (Baa3/BBB-/BBB) anticipated to total about $12 billion.

The offering includes two-year notes talked to price at the Treasuries plus 135 basis points area; five-year notes talked at the Treasuries plus 175 bps area; seven-year notes talked in the 205 bps spread area; 10-year notes talked in the 225 bps spread area; 20-year notes talked at the Treasuries plus 260 bps area and 30-year notes talked to price at the Treasuries plus 275 bps area.

NetApp Inc. (Baa2/BBB) is offering three tranches of senior notes during the session.

Initial price talk on a five-year tranche is in the Treasuries plus 175 bps area, while a seven-year note is talked to price at the 200 bps spread area and a 10-year tranche is talked to print in the 215 bps over Treasuries area.

In other primary action, General Motors Financial Co. Inc. offering two tranches of senior notes (Baa3/BBB/BBB-) that include five-year notes talked to print in the Treasuries plus 280 bps area and 10-year notes guided at the 325 bps spread area.

Financial supply also is underway for the session.

Barclays plc is talked to price $1 billion of 11-year fixed-rate resetting senior callable notes (Baa2/BBB) at the Treasuries plus 225 bps area.

Canadian Imperial Bank of Commerce is offering three-year senior notes (A2/BBB+/AA-) with initial guidance in the 100 bps over Treasuries area.

In other supply, Air Lease Corp. expects to bring new five-year medium-term notes (BBB/BBB/Kroll: A-) to the primary market over the day. The notes are talked to price in the Treasuries plus 375 bps area.

Gaming and Leisure Properties, Inc. is offering $300 million of senior notes due Jan. 15, 2031 (Ba1/BBB-/BBB-) through subsidiaries GLP Capital, LP and GLP Financing II, Inc. Initial price talk is in the Treasuries plus 410 bps to 415 bps area.

Essex Portfolio, LP intends to reopen its 2.65% guaranteed senior notes due March 15, 2032 (Baa1/BBB+/BBB+) in a $150 million offering during the session. Initial price talk is in the Treasuries plus 155 bps area.

The company first sold $500 million of the notes on Feb. 4 at 99.628 to yield 2.686%, or a spread of Treasuries plus 108 bps.

Schlumberger Holdings Corp. is in the day’s deal pipeline with an offering of 10-year senior notes (A2/A) talked to price at the Treasuries plus 195 bps area.

Other issuers expected on Wednesday include Amdocs Ltd., BP Capital Markets plc, Discover Financial Services, Inc., Standard Chartered plc, New York Life Global Funding, Pacific Life Insurance Co., Cooperatieve Rabobank U.A. and Idaho Power Co.

More than $28 billion of high-grade bonds have priced week to date, so far led by deals from Pacific Gas and Electric Co., Bank of America Corp. and Merck & Co., Inc. on Tuesday.

About $20 billion to as much as $40 billion of high-grade supply is expected by market participants over the week.

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