Morning Commentary: Micron, Westlake Chemical, EDC offer notes; Sumitomo Mitsui firms

By Cristal Cody

Tupelo, Miss., July 10 – A few high-grade issuers moved forward to tap the primary market on Wednesday.

Micron Technology, Inc. is offering two tranches of registered fixed-rate senior notes.

The deal is expected to include 7.5- and 10.5-year tranches. The 7.5-year notes were initially talked to price with a spread in the Treasuries plus 245 basis points area, a source said. Initial price talk on the 10.5-year notes is in the 275 bps over Treasuries spread area.

In other supply, Westlake Chemical Corp. is marketing a public offering of senior notes.

Also, as previously reported, Export Development Canada plans to price a dollar-denominated offering of three-year global notes on Wednesday. Initial price talk on the notes due July 18, 2022 is in the mid-swaps plus 8 bps area.

Investment-grade supply has been strong this week with about $18 billion of bonds pricing in the first two sessions.

About $15 billion to $20 billion of volume was expected by market sources for the week.

Issuance has been led this week by a $4 billion two-tranche offering of senior notes from Sumitomo Mitsui Financial Group Inc. and a $4 billion four-part offering of guaranteed notes from Total Capital International on Monday.

Bonds from Sumitomo Mitsui and Total Capital traded flat to modestly better in the secondary market, a source said.

Sumitomo Mitsui’s two tranches of senior notes (A1/A-) improved about 1 bp.

The Tokyo-based banking and financial company sold $2 billion of 2.696% notes due July 16, 2024 at a spread of Treasuries plus 85 bps and $2 billion of 3.04% notes due July 16, 2029 with a Treasuries plus 100 bps spread.

Secondary trading volume improved to $20.43 billion on Tuesday from $18.29 billion of bonds traded on Monday, according to Trace.

Elsewhere on Wednesday and Thursday, market focus is expected to turn toward a possible rate cut at the Federal Reserve’s July 30-31 monetary policy meeting.

The minutes from the Federal Open Market Committee’s June meeting will be released on Wednesday.

Also on Wednesday, Federal Reserve chairman Jerome Powell will begin a two-day monetary policy report to Congress.

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