Morning Commentary: High-grade supply quiet; Banco Santander continues roadshow, notes mixed

By Cristal Cody

Tupelo, Miss., Oct. 12 – Investment-grade supply slowed early Thursday with no reported corporate issuers in the day’s bond deal pipeline.

The previous two sessions have seen steady supply with deals from issuers including Wal-Mart Stores Inc. and Northrop Grumman Corp.

Banco Santander, SA is continuing the second day of a roadshow that started on Wednesday and runs through Friday for a Rule 144A and Regulation S dollar-denominated offering of senior notes (A3/BBB+/A-), according to a market source.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Santander Investment Securities Inc. are the arrangers.

Elsewhere, the three-month Libor yield was reported unchanged at 1.36% early Thursday.

Secondary market volume has been lighter over the short week with $17 billion of bonds traded on Wednesday and $13.8 billion traded on Tuesday, according to Trace.

Banco Santander’s senior notes (/BBB+/A-) were mixed in early secondary trading, a source said.

The Madrid-based banking company’s 3.5% notes due April 11, 2022 softened to 102.23 over the morning from where the notes went out on Wednesday at 102.30.

Banco Santander sold $1 billion of the notes on April 4, 2017 at 99.38 to yield 3.64%, or a spread of Treasuries plus 168 basis points.

Banco Santander’s 4.25% notes due April 11, 2027 were last seen in the secondary market on Wednesday in thin volume at 103.69.

The company sold $1 billion of the notes in the April 4, 2017 offering at 99.11 to yield 4.36%, or a Treasuries plus 200 bps spread.

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