Morning Commentary: Heavy high-grade supply continues; Anheuser-Busch, Shell on tap

By Cristal Cody

Tupelo, Miss., April 1 – Investment-grade supply is expected to remain elevated on Wednesday with numerous companies marketing bonds over the morning, sources report.

Anheuser-Busch InBev Worldwide Inc. is on deck with an offering of fixed-rate notes (Baa1/A-) that includes 10-, 20-, 30- and 40-year tranches.

The 10-year notes are talked to price at the Treasuries plus 330 basis points area, the 20-year notes are talked at the 350 bps area, the 30-year issue is talked at the 360 bps area and the 40-year notes are talked to print at the 380 bps spread area.

Shell International Finance BV is offering three tranches of guaranteed senior notes (Aa2/AA-) on Wednesday. Tranches of five- and 30-year notes are initially talked to price with a spread in the 250 bps over Treasuries area, while the 10-year notes are talked at the 260 bps spread area.

Equinor ASA (Aa2/AA-) expects to tap the primary market with five tranches of fixed-rate guaranteed notes. The deal includes five-year notes with initial talk in the Treasuries plus 270 bps area, seven-year notes talked at the 275 bps area, 10-year notes talked at the 280 bps area, 20-year notes talked at the 260 bps area and 30-year notes talked at the 270 bps spread area.

Meanwhile, Dollar General Corp. is marketing two tranches of senior notes (Baa2/BBB) during the session. Initial price talk on the 10- and 30-year tranches is in the Treasuries plus 337.5 bps area.

Financial supply also is expected on Wednesday.

Citigroup Inc. plans to price six-year fixed-to-floating rate senior notes (A3/BBB+/A) over the day. The notes are talked to price in the Treasuries plus 312.5 bps area.

In other primary action, PPL Capital Funding Inc. is offering 10-year senior notes (Baa2/BBB+) that are talked to print with a spread in the 375 bps to 387.5 bps area.

CPPIB Capital Inc. (Aaa/AAA/AAA) plans to sell new two-year notes on Wednesday. Initial price talk is at the mid-swaps plus 35 bps area.

NextEra Energy Capital Holdings Inc. intends to sell new five-year guaranteed debentures (Baa1/BBB+/A-) that are talked at the 312.5 bps spread area.

Also on Wednesday, Penske Truck Leasing Co., LP and co-issuer PTL Finance Corp. intend to price long five-year senior notes that are initially guided at the Treasuries plus 400 bps area.

Southern Co. (Baa2/BBB+/BBB+) is marketing 10-year notes with initial talk in the Treasuries plus 337.5 bps to 350 bps area.

In addition, Carnival Corp. (Baa1/BBB) is offering $4 billion of three-year first priority senior secured notes talked at the 12% area in a deal expected to be run off the high-yield desk.

Meanwhile, a multiple-tranche Rule 144A and Regulation S offering of senior notes from T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc. is expected as soon as Thursday, a source said. The company announced an offering of senior notes over the morning in conjunction with the closing of its merger with Sprint Corp.

The company used a $23 billion bridge loan for the acquisition closing, a source said.

T-Mobile held a roadshow in 2019 for the offering.

High-grade issuers priced about $50 billion of bonds in the first two sessions of the week.

About $30 billion to as much as $60 billion of deal volume was expected this week, according to market sources.

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