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Morning Commentary: High-grade primary quiet early; Carrier resumes investor calls
By Cristal Cody
Tupelo, Miss., Feb. 12 – The investment-grade primary market was quiet at the start of Wednesday’s session with no reported bond issuers.
Week to date, deal volume totals more than $18 billion.
About $25 billion to $35 billion of bond supply is expected this week, according to syndicate sources.
In other activity, Carrier Global Corp. continues the second day of fixed income investor calls on Wednesday for a possible $9.2 billion offering of senior notes (Baa3/BBB) as part of its spinoff from United Technologies Corp.
Fixed income investor calls from Otis Worldwide Corp., which also is being spun off from United Technologies, are expected to follow for a possible $5.3 billion senior note (Baa2/BBB) offering.
Week to date, deal volume has been led by Bank of America Corp.’s $5 billion two-part offering of fixed-to-floating rate senior notes (A2/A-/A+) on Monday and Novartis Capital Corp.’s $5 billion four-tranche sale of notes (A1/AA-/AA-) on Tuesday.
New issues were mixed in the secondary market, a source said.
Sysco Corp.’s $1 billion of senior notes (A3/BBB+) that priced in two tranches on Tuesday were wrapped around issuance to about 4 basis points tighter.
The company’s $500 million tranche of 2.4% green notes due Feb. 15, 2030 firmed about 4 bps. The notes priced at a spread of Treasuries plus 85 bps.
The notes were talked to price in the Treasuries plus 105 bps area.
Sysco’s $500 million of 3.3% notes due Feb. 15, 2050, priced at a Treasuries plus 125 bps spread, were unchanged.
Initial price guidance was in the Treasuries plus 145 bps to 150 bps area.
In the broader secondary market, trading volume rose to $22.14 billion on Tuesday from $17.87 billion on Monday, according to Trace data.
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