Morning Commentary: High-grade issuers flood market; T-Mobile, BP, Ross, others on deck

By Cristal Cody

Tupelo, Miss., April 2 – Heavy high-grade bond supply continues in the primary market on Thursday with several deals expected to price over the session, sources said.

T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc. is marketing a five-part offering of senior secured notes (Baa3/BBB-/BBB-) after holding fixed income investor calls on Wednesday. The total deal size is expected in the $23 billion area.

A tranche of five-year notes is initially talked to price at the Treasuries plus 350 basis points area.

A seven-year tranche is talked to print with a spread in the 362.5 bps area.

The 10-, 20- and 30-year notes are talked to price at the Treasuries plus 375 bps area.

BP Capital Markets America Inc. (A1/A-) is on deck with a four-part offering of senior notes. A three-year tranche is talked to print in the Treasuries plus 300 bps area, while a five-year issue is talked at the Treasuries plus 310 bps area. The deal includes seven- and 10-year tranches with initial price talk in the Treasuries plus 325 bps area.

Ross Stores, Inc. is marketing four tranches of fixed-rate senior notes. The offering includes five-, seven-, 10- and 30-year notes talked at the 425 bps spread area.

Also Thursday, VMware, Inc. is offering three tranches of senior notes. The deal includes five-, seven- and 10-year notes talked to price at the Treasuries plus 450 bps area.

Meanwhile, Hyundai Capital America (Baa1/BBB+) is offering three tranches of notes on Thursday.

Initial price talk on three- and five-year tranches is at the 550 bps spread area, while a 10-year issue is talked to price at the Treasuries plus 575 bps area.

Also on Thursday, Ryder System, Inc. plans to sell five-year medium-term notes that are initially guided to print at the Treasuries plus 425 bps area.

Evergy Kansas Central Inc. intends to price new 30-year first mortgage bonds that are talked at the Treasuries plus 250 bps area.

TransCanada Pipelines Ltd. is on deck with 10-year medium-term debentures (Baa1/BBB+/A-) that are talked to print with a spread in the 375 bps over Treasuries area.

Meanwhile, Lloyds Banking Group plc (A3/A+) is offering five-year senior fixed-to-fixed rate notes on Thursday that are initially guided at the Treasuries plus 375 bps area.

Paccar Financial Corp. (A1/A+) expects to price new three-year medium-term notes during the session. Initial price talk is in the 300 bps to 312.5 bps over Treasuries area.

Also on Thursday, CPPIB Capital Inc. (Aaa/AAA/AAA) launched a $1.25 billion offering of two-year senior notes at mid-swaps plus 33 bps, tighter than initial guidance in the mid-swaps plus 35 bps area.

High-grade supply has been heavy this week after record issuance in March with about $70 billion of bonds already priced in the first three sessions.

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

Market tone was positive over the morning on a boost in crude oil prices. Stocks improved after closing weaker on Wednesday with indices up more than 1% over the morning.

The iShares iBoxx Investment Grade Corporate Bond ETF rose 0.82% early Thursday after closing down 1.45% in the prior session.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.