Morning Commentary: High-grade supply thins; Swedish Export Credit, KfW, Bank of Japan on tap

By Cristal Cody

Tupelo, Miss., Aug. 22 – Several issuers are marketing new issues in the high-grade bond market on Tuesday, according to informed sources.

Swedish Export Credit Corp. is offering five-year global notes set to price during the session.

KfW intends to price a benchmark sized offering of two-year senior notes on Wednesday. The notes were initially talked to price in the mid-swaps minus 4 basis points area.

Also on Wednesday, the Development Bank of Japan plans to price a two-tranche benchmark sized offering of five- and 10-year senior notes. The bank was marketing the notes early Tuesday. The five-year notes were initially talked to price in the mid-swaps plus 48 bps area, while initial price guidance on the 10-year notes was in the mid-swaps plus 63 bps area.

Secondary market volume has thinned with many out for end-of-summer vacations. High-grade trading volume totaled $10.9 billion on Monday, up slightly from the $9.78 billion of bonds traded on Friday, according to Trace.

Sherwin-Williams Co.’s senior notes (Baa3/BBB/BBB) that priced in May were active in early secondary trading, a source said. Sherwin-Williams’ 3.45% notes due June 1, 2027 softened to 100.44 from 100.82 on Monday.

The Cleveland-based developer, manufacturer and distributor of paints and related products sold $1.5 billion of the notes on May 2 at 99.637 to yield 3.493%, or a spread of Treasuries plus 120 bps.

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