Morning Commentary: Bank of America, PNC, Comerica on tap; Westpac Banking active

By Cristal Cody

Tupelo, Miss., July 18 – Investment-grade supply resumed on Thursday after bond issuers stayed out of the primary market in the previous session.

Bank of America Corp. plans to price fixed-to-floating rate senior medium-term notes.

PNC Financial Services Group, Inc. is offering seven-year fixed-rate senior notes.

Comerica Inc. intends to reopen its 4% senior notes due Feb. 1, 2029.

Financial issuance was anticipated by market sources following the release of second-quarter earnings reports this week.

Bank of America and U.S. Bancorp released earnings results on Wednesday, following quarterly releases from Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. on Tuesday and Citigroup Inc. on Monday.

Morgan Stanley reported its earnings results on Thursday.

High-grade corporate issuers have priced more than $7 billion of bonds week to date.

About $25 billion to $30 billion of supply was forecast by market sources for the week.

Corporate deal volume this week has been led by Westpac Banking Corp.’s $2.25 billion two-part offering of subordinated notes on Tuesday.

Westpac Banking’s bonds have improved in heavy trading, according to market sources.

The Sydney, Australia-based bank’s notes were quoted on Wednesday 6 basis points to 9 bps tighter than issuance.

In early secondary trading on Thursday, the notes were trading better than where the issues priced.

Westpac Banking’s $1 billion of 4.421% notes due July 24, 2039 opened slightly weaker in the 102.09 area after going out on Wednesday in the 102.19 area, a market source said.

The notes were priced on Tuesday at par to yield a spread of Treasuries plus 180 bps.

The company’s $1.25 billion of 4.11% notes due July 24, 2034, which priced Tuesday at par to yield a spread of 200 bps over Treasuries, traded slighter lower in the 100.92 area after closing on Wednesday at 100.98.

The secondary market saw $19.01 billion of investment-grade issues trade on Wednesday, compared to $20 billion on Tuesday and $14.88 billion on Monday, according to Trace.

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