High-grade issuers mum during session; Carrier continues investor calls; T-Mobile deal eyed

By Cristal Cody

Tupelo, Miss., Feb. 12 – The investment-grade dollar-denominated bond market stayed quiet over Wednesday’s session.

The sole high-grade issuer was AT&T Inc. with a $1.75 billion $25-par preferred stock offering.

Week to date, bond deal volume totals more than $18 billion.

About $25 billion to $35 billion of supply is expected this week, according to syndicate sources.

During the session, the Province of Ontario priced C$500 million of 1.85% green bonds due Feb. 1, 2027 at a spread of 49.5 basis points over the Government of Canada benchmark, tighter than initial guidance in the 51 bps area.

The deal follows the Province of Quebec’s C$500 million of 1.85% green notes due Feb. 13, 2027 priced last week at a spread of 48 bps over the Government of Canada benchmark. Quebec’s offering closes on Thursday.

In other activity, Carrier Global Corp. continued 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 spin-off from United Technologies Corp.

Otis Worldwide Corp., which also is being spun off from United Technologies, is expected to hold fixed income investor calls on Friday for a potential $5.3 billion senior note (Baa2/BBB/) offering, a market source said.

Carrier Global’s deal is anticipated to hit the primary market on Thursday, a source said.

A $20 billion-plus investment-grade bond deal from T-Mobile U.S. Inc. following court approval on Tuesday for its acquisition of Sprint Corp. is expected to be in the primary market later in February or March, a source said.

T-Mobile held a roadshow in 2019 for the 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.

The Markit CDX North American Investment Grade 33 index firmed more than 1 bp to close the day at a spread of 43.8 bps.

New issues were mixed in the secondary market, a source said.

Sysco Corp.’s $1 billion of senior notes (A3/BBB+/) priced in two tranches on Tuesday were wrapped around issuance to about 4 bps 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.

Telecommunications bonds remained mostly tighter on Wednesday.

AT&T’s 4.35% notes due March 1, 2029 traded about 2 bps better than where the issue was seen on Tuesday.

Verizon Communications Inc.’s 3.875% green senior notes due Feb. 8, 2029 tightened about 5 bps.

AT&T improves

AT&T’s 4.35% notes due March 1, 2029 firmed about 2 bps to 113 bps bid during the session, a market source said.

AT&T sold $3 billion of the bonds on Feb. 13, 2019 at a spread of Treasuries plus 170 bps.

The telecommunications company is based in Dallas.

Verizon firms

Verizon Communications’ 3.875% green senior notes due Feb. 8, 2029 traded about 1 bp tighter over the day to 76 bps bid, according to a market source.

Verizon sold $1 billion of the notes (Baa1/BBB+/A-) on Feb. 5, 2019 at a spread of Treasuries plus 120 bps.

The telecommunications company is based in New York City.

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