Morning Commentary: Investment-grade primary mostly quiet at open; FHLBank taps market

By Cristal Cody

Tupelo, Miss., Nov. 15 – The high-grade primary market opened on a mostly quiet note on Thursday following DowDuPont Inc.’s $12.7 billion eight-part offering of senior notes priced in the previous session.

The Federal Home Loan Bank System announced over the morning that it priced $1.25 billion of new 10-year Global notes.

Investment-grade issuers have priced more than $18 billion of bonds week to date.

About $25 billion to $30 billion of supply was expected for the short market week, according to syndicate sources.

New issues were mixed in the secondary market with volatility crimping performance of bonds, including DowDuPont’s notes, according to market sources.

Svenska Handelsbanken AB’s 3.9% notes due Nov. 20, 2023 (Aa2/AA-/AA) have firmed about 5 basis points from where the notes priced on Tuesday, a source said. The Stockholm-based bank sold $1.4 billion of the notes at a spread of 95 bps over Treasuries.

Marriott International Inc.’s senior notes (Baa2/BBB) that priced on Tuesday traded about 5 bps to 10 bps wider than pricing levels. The Bethesda, Md.-based lodging company’s 4.65% notes due Dec. 1, 2028 eased to the 165 bps area, according to a market source. Marriott sold $300 million of the 10-year notes at a Treasuries plus 155 bps spread.

Secondary trading volume has ramped up this week. On Wednesday, $23.75 billion of bonds were traded, up from $21 billion on Tuesday, according to Trace.

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