Morning Commentary: LyondellBasell, Standard Chartered, Deere, Athene, Sweden on tap

By Cristal Cody

Tupelo, Miss., Oct. 6 – High-grade supply is expected to be anchored by a six-tranche offering of guaranteed notes from LyondellBasell Industries NV subsidiary LYB International Finance III BV on Tuesday, sources report.

LYB International Finance III is offering six tranches of guaranteed notes (Baa2/BBB-/BBB) that include one tranche of floating-rate notes and five tranches of fixed-rate notes.

The three-year floaters are talked to price at the Libor plus 105 basis points area.

Initial guidance on the fixed-rate bonds includes five-year notes talked at the Treasuries plus 125 bps area, 10-year notes talked at the 190 bps spread area, 20-year notes guided at the 220 bps over Treasuries area, 30-year notes talked at the 240 bps spread area and 40-year notes talked to print in the Treasuries plus 260 bps area.

In other primary action, Standard Chartered plc intends to price dollar-denominated notes due Oct. 14, 2023 (Baa2/BBB-/A-) on Tuesday.

Initial price guidance is in the Treasuries plus 150 bps area.

John Deere Capital Corp. is offering $500 million of three-year senior medium-term notes (A2/A/A) on Tuesday with initial price talk at the Treasuries plus 45 bps area.

Athene Holding Ltd. is marketing $400 million of registered fixed-rate senior notes due Jan. 15, 2031 (BBB+/BBB) at the 325 bps spread area.

W.P. Carey Inc. is offering $350 million of registered fixed-rate senior notes due Feb. 1, 2031 (Baa2/BBB). Price guidance is in the Treasuries plus 220 bps area.

Also on Tuesday, MassMutual Global Funding II is offering funding agreement-backed notes due Oct. 9, 2030 (Aa3/AA+/AA+) with price talk in the Treasuries plus 105 bps area.

In other supply, the Kingdom of Sweden (Aaa/AAA/AAA) launched a $2.5 billion Rule 144A and Regulation S offering of notes due Oct. 14, 2022 at mid-swaps plus 1 bp over the morning.

Initial price talk was in the mid-swaps plus 3 bps area with guidance firmed to the mid-swaps plus 2 bps area.

More than $8 billion of corporate and sovereign, supranational and agency bonds priced on Monday, led by Berkshire Hathaway Finance Corp.’s $2.5 billion two-part offering of guaranteed senior notes (Aa2/AA/A+).

About $15 billion to $20 billion of high-grade supply is anticipated by syndicate sources to print this week.

PepsiCo active

In the secondary market, PepsiCo Inc.’s $1.5 billion of senior notes (A1/A+) that priced in two tranches on Monday were heavily traded over the morning, a source said.

PepsiCo’s inaugural tranche of 0.4% diversity and inclusion notes due Oct. 7, 2023 improved to 100.07.

The company sold $750 million of the diversity and inclusion bonds at 99.943 to yield 0.419%, or a spread of 23 bps over Treasuries.

PepsiCo’s 1.4% senior notes due Feb. 25, 2031 were seen at 100.02 in early trading.

The company sold $750 million of the notes at 99.597 to yield 1.442%, or a spread of 67 bps over Treasuries.

High-grade corporate secondary market volume totaled $18.84 billion on Monday, according to Trace.

Meanwhile, market tone was modestly better over the morning.

The iShares iBoxx Investment Grade Corporate Bond ETF was up 0.13% to 134.54.

The Pimco Investment Grade Corporate Bond index improved 0.06% to 114.66.

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