Morning Commentary: American Express, Westpac, Caterpillar on tap; Weyerhaeuser active

By Cristal Cody

Tupelo, Miss., Feb. 19 – Several companies announced plans early Tuesday to tap the high-grade bond market in what is expected to be a fairly busy holiday-shortened market week.

American Express Co. is on deck with two tranches of notes due 2021 and 2024.

Australian bank Westpac Banking Corp. is offering fixed- and floating-rate dollar-denominated notes.

Ventas Realty, LP plans to sell guaranteed senior notes.

Caterpillar Financial Services Corp. is marketing floating-rate medium-term notes.

Also, Mednax, Inc. plans to price a $200 million add-on to its split-rated 6.25% senior notes due Jan. 15, 2027 (Ba2/BBB-).

In other activity expected on Tuesday, Weyerhaeuser Co. (Baa2/BBB) will hold fixed income investor calls, a market source said. BofA Merrill Lynch, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the arrangers.

About $20 billion to $25 billion of investment-grade issuance is expected by syndicate sources this week.

The bond markets were closed on Monday for Presidents Day.

“As we approach the tail end of the earnings reporting season, the strong pace of issuance will likely continue with recent trends of companies no longer waiting to file 10-Ks before issuing bonds,” according to a BofA Merrill Lynch report released on Tuesday.

“At the same time, given the significant rally in spreads this year and still solid market tone, it's possible that some March deals might get pulled forward to the second half of February. With relatively light Yankee financial issuance in January, we could see some catch-up activity in that pipeline as well.”

Investment-grade issuers priced more than $38 billion of bonds last week, beating forecasts of about $25 billion to $30 billion of volume.

The secondary market ended Friday ahead of the holiday with $17.54 billion of corporate trading volume, according to Trace data.

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