Morning Commentary: Enterprise Products, Highwoods, Truist offer notes; FedEx on deck

By Cristal Cody

Tupelo, Miss., July 30 – High-grade supply is expected to pick up on Thursday with at least three issuers marketing securities.

Enterprise Products Operating LLC plans to price new and reopened guaranteed fixed-rate senior notes (Baa1/BBB+/BBB+) in two parts. The offering includes a new tranche and an add-on to the company’s 2.8% notes due Jan. 31, 2030 that was first priced on Jan. 6 at 99.921 to yield 2.809%, or a spread of 100 basis points over Treasuries.

Highwoods Realty LP intends to price new notes due 2031 (Baa2/BBB) in its first new offering of 2020. The company was last in the primary market on Feb. 26, 2019 with a $350 million sale of 10-year notes.

Also, Truist Financial Corp. is marketing seven-year senior medium-term notes (A3/A-/A+) and an offering of $25-par perpetual preferred stock over the day.

In other activity on Thursday, Washington Real Estate Investment Trust (Baa2/BBB) is holding fixed income investor calls to update investors with possible issuance to follow, sources report.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

Meanwhile, a deal is expected soon from Federal Express Corp. after the company held fixed income investor calls on Wednesday for $690 million of registered class AA pass-through certificates (Aa3/AA-).

More than $20 billion of investment-grade issues have priced week to date, beating market forecasts of about $10 billion to $15 billion of supply this week.

Supply was given a boost this week from AT&T Inc.’s $11 billion five-part offering of senior global notes (Baa2/BBB/A-) that priced on Monday.

The notes were seen trading flat to tighter on the short end in the secondary market, a source said.

AT&T’s 1.65% notes due Feb. 1, 2028 improved to 107 bps bid.

The notes priced in a $2.25 billion tranche at a spread of Treasuries plus 120 bps.

Initial price talk was in the Treasuries plus 150 bps area.

Secondary market volume has increased over the week with $22.29 billion of high-grade corporate bonds traded on Wednesday, up from $21.85 billion on Tuesday and $16.86 billion on Monday, according to Trace data.

Market tone had improved over Wednesday’s session but opened Thursday soft.

The Pimco Investment Grade Corporate Bond index fell 24 cents to 116.86.

The iShares iBoxx Investment Grade Corporate Bond ETF was off 15 cents at 138.19.

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