Morning Commentary: Steel Dynamics, Quest Diagnostics, Welltower on tap; light supply eyed

By Cristal Cody

Tupelo, Miss., Dec. 9 – Several issuers are offering new bonds in the high-grade primary market on Monday.

Steel Dynamics, Inc. intends to price a two-tranche offering of fixed-rate senior notes (Baa3/BBB-/BBB).

Quest Diagnostics Inc. is offering fixed-rate senior notes (Baa2/BBB+/BBB).

Also, Welltower Inc. plans to price new fixed-rate green notes (Baa1/BBB+/BBB+).

About $5 billion to $10 billion of supply is forecast this week with volume expected to thin for the remainder of the year, according to market sources.

The bulk of issuance this week is expected to be front-loaded ahead of the Federal Reserve’s monetary policy rate decision on Wednesday, sources said.

Investment-grade issuers priced more than $15 billion of paper last week, in line with forecasts of about $15 billion to $20 of deal volume.

No changes in the Federal Reserve’s monetary policy are expected at the final meeting of 2019, a source said.

The Federal Reserve has trimmed rates three times this year. The final cut announced in October lowered the target range for the Federal Funds rate to 1.5% to 1.75%.

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