Morning Commentary: Time Warner, Rentenbank market high-grade bonds; Xcel Energy firms

By Cristal Cody

Eureka Springs, Ark., Nov. 29 – Several investment-grade issuers are slated to tap the bond market on Tuesday.

Time Warner Inc., Avnet, Inc., Arch Capital Group Ltd., L-3 Communications Corp. and Ameren Illinois Co. are marketing new notes.

In addition, Landwirtschaftliche Rentenbank plans to sell five-year Global Notes initially guided to price in the mid-swaps plus 33 basis points area.

Market sources expect as much as $25 billion of bond volume for the week.

Investment-grade bonds were mixed in secondary trading.

Xcel Energy Inc.’s 3.35% senior notes due 2026 that priced on Monday traded about 6 bps better.

Bank of America Corp.’s 4.183% medium-term subordinated notes due 2027 that priced in the previous week eased about 3 bps to trade wrapped around issuance.

The three-month Libor yield was unchanged at 94 bps early Tuesday, a source said.

On Monday, $16.88 billion of high-grade bonds were traded, according to Trace.

Xcel Energy stronger

Xcel Energy’s 3.35% notes due 2026 tightened to 99 bps bid in secondary trading, a market source said.

The company sold $500 million of the 10-year notes (A3/BBB+/BBB+) on Monday at a spread of 105 bps over Treasuries.

The public utility holding company is based in Minneapolis.

Bank of America eases

Bank of America’s 4.183% notes due 2027 were quoted about 3 bps softer at 185 bps bid, according to a market source.

The bank sold $2 billion of the notes (Baa3/BBB/A-) on Nov. 21 at a spread of 185 bps over Treasuries.

The financial services company is based in Charlotte, N.C.

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