Morning Commentary: High-grade supply heavy; Apple, Starbucks, Altria, Amgen on deck

By Cristal Cody

Tupelo, Miss., May 4 – Heavy volume is expected in the high-grade primary market on Monday with issuers including Apple Inc., Starbucks Corp., Kraft Heinz Foods Co., Altria Group Inc. and Amgen Inc. offering bonds, sources report.

Apple is marketing four tranches of senior notes (Aa1/AA+) that include three-year notes with initial talk in the Treasuries plus 95 basis points area, five-year notes talked at the 110 bps spread area, 20-year notes talked at the 130 bps spread area and 30-year notes talked at the 170 bps over Treasuries area.

Starbucks plans to price three tranches of senior notes (Baa1/BBB+/BBB+) on Monday. Initial price talk on a two-year note is at the Treasuries plus 160 bps area, while a tranche of long 10-year notes is talked at the 220 bps spread area and long 30-year notes are talked to print at the 250 bps spread area.

Kraft Heinz is offering two tranches of split-rated senior notes (Baa3/BBB-/BB+) that include $750 million of seven-year notes talked at the 4.25% area and $750 million of notes due in 2031 talked at the 4.5% area.

Altria is on deck with three tranches of senior notes (A3/BBB) that include five-year notes with initial guidance in the Treasuries plus 245 bps area, 10-year notes talked at the 320 bps spread area and 30-year notes talked at the 360 bps spread area.

Amgen plans to price new and reopened senior notes (Baa1/A-) in four parts on Monday. The company expects to price an add-on to its 2.2% notes due Feb. 21, 2027 that are initially talked to price at the Treasuries plus 165 bps area, new notes due Feb. 25, 2031 talked at the 185 bps spread area, an add-on to its 3.15% notes due Feb. 21, 2040 at the 190 bps spread area and a tap of its 3.375% notes due Feb. 21, 2025 that is talked at the 200 bps spread area.

Also on Monday, Oneok Inc. is marketing three tranches of senior notes (Baa3/BBB) with initial talk on six-, 11- and 31- year notes at the 637.5 bps over Treasuries area.

Marsh & McLennan Cos., Inc. expect to price $600 million of new long 10-year senior notes (Baa1/A-) over the day. The notes are talked to print at the Treasuries plus 205 bps area.

Meanwhile, Whirlpool Corp. plans to price new 30-year notes (Baa1/BBB/BBB) on Monday. Initial guidance is in the Treasuries plus 387.5 bps area.

In addition, New York Life Global Funding is marketing new three-year funding agreements-backed notes (Aaa/AA+/AAA) with initial price talk at the 120 bps over Treasuries area.

Investment-grade supply is forecast to total in the $60 billion to $75 billion area this week following nearly $90 billion of issuance last week.

About $250 billion to $300 billion of volume is expected by market participants in May.

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