Morning Commentary: Primary action light; Shell firms modestly; Valero Energy flat; CDX eases

By Cristal Cody

Eureka Springs, Ark., Sept. 9 – BNZ International Funding Ltd. tapped the primary market early Friday with a $600 million two-part sale of five-year notes, while primary action is expected to be mostly quiet over the rest of the session.

New investment-grade bonds traded mostly flat to modestly better in the secondary market.

Shell International Finance BV’s $4.75 billion five-part guaranteed senior notes (Aa2/A) that priced on Wednesday traded about 1 basis point to 2 bps tighter.

Valero Energy Corp.’s $1.25 billion offering of 3.4% senior notes due 2026 were unchanged from where the bonds priced on Wednesday.

The Markit CDX North American Investment Grade index opened 2 bps softer at a spread of 74 bps.

The three-month Libor yield was down 1 bp to 83 bps on Friday.

Secondary trading volume totaled $15.03 billion on Thursday, compared to $16.45 billion on Wednesday and $12.62 billion on Tuesday, according to Trace.

Shell modestly better

Shell’s 2.5% notes due 2026 traded at 106 bps offered in the secondary market early Friday, a source said.

Shell sold $1 billion of the 10-year notes on Wednesday at 108 bps over Treasuries.

Shell’s $1.25 billion offering of 3.75% bonds due 2046, which priced on Wednesday at a spread of 155 bps plus Treasuries, was quoted at 154 bps offered in secondary trading.

The notes are guaranteed by parent oil and gas company Royal Dutch Shell plc, which is based in the Hague, the Netherlands.

Valero unchanged

Valero Energy’s 3.4% senior notes due 2026 were unchanged in secondary trading in the 190 bps area, according to a market source.

The company sold $1.25 billion of the 10-year notes (Baa2/BBB/BBB) on Wednesday at a spread of 190 bps over Treasuries.

San Antonio-based Valero is an oil refinery owner and operator.

© 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.