Morning Commentary: Post-holiday high-grade supply light; Toyota, Athene notes on deck

By Cristal Cody

Tupelo, Miss., Oct. 13 – A couple of high-grade issuers offered new bonds on Tuesday as the market reopened following the three-day holiday weekend in the United States, informed sources said.

Toyota Motor Credit Corp. intends to price three tranches of medium-term notes (A1/A+/A+), including two-year floating-rate notes, two-year fixed-rate notes and five-year fixed-rate notes.

The floaters are expected to price off the SOFR benchmark. The two-year fixed-rate notes are talked to price in the Treasuries plus 40 basis points area, while the five-year notes are talked to print in the 75 bps to 80 bps spread area.

Also on Tuesday, Athene Global Funding is marketing $300 million of three-year senior secured notes (A/A) with price talk in the Treasuries plus 120 bps spread area.

About $15 billion to $20 billion of new deal volume is expected this week with market participants eying the potential for more following the release of quarterly earnings reports from the major banks this week.

JPMorgan Chase & Co. and Citigroup Inc. released third-quarter earnings reports before the market opened on Tuesday.

On Wednesday, Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co. are scheduled to post results.

Meanwhile, the sovereign, supranational and agency primary market is expected to be active this week.

Caisse d'Amortissement de la Dette Sociale (Aa2//AA) is marketing a Rule 144A and Regulation S offering of dollar-denominated 10-year social bonds to price on Wednesday.

Initial price talk is in the mid-swaps plus 30 bps area.

The Council of Europe Development Bank (Aa1/AAA/AA+) also plans to tap the primary market on Wednesday with a dollar-denominated offering of three-year senior notes.

Initial price talk is in the mid-swaps plus 6 bps area.

Market tone was modestly softer at the start of the day.

The Pimco Investment Grade Corporate Bond index declined 0.18% to 115.25 over the morning, while the iShares iBoxx Investment Grade Corporate Bond ETF fell 0.10% to 135.57.

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