Morning Commentary: Sumitomo Mitsui, Bank Nederlandse offer bonds; Bank of America improves

By Cristal Cody

Tupelo, Miss., July 6 – Primary action is expected in the high-grade bond market on Thursday with at least two issuers in the day’s deal pipeline.

Sumitomo Mitsui Financial Group, Inc. announced that it intends to price two tranches of senior fixed- and floating-rate notes.

Bank Nederlandse Gemeenten NV (Aaa/AAA/AA+) is offering three-year floating-rate notes that were talked to price in the Libor plus 10 basis points area. Barclays, Goldman Sachs & Co. and HSBC Securities (USA) Inc. are lead managers of the Rule 144A and Regulation S deal.

U.S. high-grade issuers stayed out of the primary market on Monday with the early market close and on Wednesday following the Independence Day holiday.

About $5 billion to $10 billion of supply has been predicted by market participants for the shortened week.

In secondary trading activity, bank and financial paper has been active ahead of second quarter earnings releases by the major banks later in the month.

Bank of America Corp.’s 3.248% senior notes due Oct. 21, 2027 (Baa1/BBB+/A) have traded over the last two sessions in the 96 area and went out on Wednesday at 96.94, a market source said. The notes traded early Thursday at 98.51.

Bank of America sold the notes in a $2.5 billion tranche on Oct. 18, 2016 at par to yield a spread of 150 bps over Treasuries.

Bank of America reports its earnings results on July 18.

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

Overall secondary trading volume totaled $13.7 billion on Wednesday, while $2.52 billion of high-grade issues were traded during the early market session on Monday, according to Trace.

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