Morning Commentary: World Bank prices; issuers line up; CDX better; Alphabet, Microsoft firm

By Cristal Cody

Eureka Springs, Ark., Aug. 4 – International Bank for Reconstruction and Development (World Bank) (Aaa/AAA) kicked off Thursday’s bond offerings with the sale of the bank’s second U.S. dollar global bond deal of the year.

World Bank announced early Thursday that it priced $1.5 billion of 1.125% four-year global bonds with a spread of 35.3 basis points over Treasuries.

Also on tap for the day, Dominion Resources, Inc. plans to price a three-part offering of senior notes due Aug. 15, 2019, Aug. 15, 2021 and Aug. 15, 2026.

In addition, Huntington Bancshares Inc. is marketing senior notes via bookrunners Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Huntington Investment Co.

August already has seen $40 billion of investment-grade bonds price since Monday, while the consensus for the “entire month” was $60 billion, according to an RBC Capital Markets, LLC note on Thursday.

The Markit CDX North American Investment Grade index opened the day 1 bp tighter at a spread of 74 bps.

The three-month Libor yield rose 1 bp to 77 bps on Thursday.

Google holding company Alphabet Inc.’s 1.998% notes due 2026 that priced on Tuesday traded 2 bps tighter in the secondary market.

Microsoft Corp.’s senior notes (Aaa/AAA) that priced on Monday traded about 1 bp to 5 bps better early Thursday.

Secondary trading volume totaled $17.77 billion on Wednesday, up from $17.29 billion on Tuesday and $12.98 billion on Monday, according to Trace.

Alphabet firms

Alphabet’s 1.998% notes due 2026 traded 2 bps better than issuance at 66 bps offered in the secondary market, a source said.

Alphabet priced $2 billion of the notes (Aa2/AA) on Tuesday at a spread of 68 bps over Treasuries.

Mountain View, Calif.-based Alphabet is the holding company for Google and other subsidiaries.

Microsoft improves

Microsoft’s 2.4% notes due 2026 tightened about 1 bp to 86 bps offered, according to a market source.

The company sold $4 billion of the notes on Monday at a spread of 90 bps over Treasuries.

The computer software company is based in Redmond, Wash.

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