Morning Commentary: Toyota, BMO, Charter, UDR bonds on tap; Commerzbank offering eyed

By Cristal Cody

Tupelo, Miss., June 25 – Investment-grade issuers kept the high-grade market active early Tuesday with new bond deal announcements.

Toyota Motor Corp. is marketing three tranches of dollar-denominated fixed-rate senior notes.

Bank of Montreal plans to price a dollar-denominated offering of five-year senior medium-term notes.

Charter Communications, Inc. subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. are offering new 30-year senior secured notes.

Charter’s notes were initially talked to price with a spread in the Treasuries plus 262.5 basis points area, a source said.

Also on Tuesday, real estate investment trust UDR, Inc. offered guaranteed medium-term notes.

Meanwhile, Commerzbank AG announced over the morning that it intends to hold a roadshow for a $500 million minimum offering of tier 1 capital subordinated bonds.

The bonds will have a perpetual maturity and a first call date in April 2025.

Investment-grade corporate issuers priced $5 billion of new notes over Monday’s session. Deal volume was led by Enterprise Products Operating LLC’s $2.5 billion two-part offering of guaranteed fixed-rate senior notes.

The week is expected to post about $15 billion of issuance, syndicate sources said.

Monday’s session saw strong secondary market volume with $20.37 billion of investment-grade issues traded, compared to $17.34 billion of trading volume in the same period a week ago, according to Trace data.

Enterprise Products Operating’s notes tightened across both tranches in secondary trading, a market source said.

The company’s 3.125% notes due July 31, 2029 firmed about 3 bps.

Enterprise Products sold $1.25 billion of the notes on Monday at 99.955 to yield 3.13% and a spread of 110 bps over Treasuries.

The $1.25 billion tranche of 4.2% notes due Jan. 31, 2050 tightened about 6 bps in the secondary market. The tranche priced Monday at 99.792 to yield 4.212%, or a Treasuries plus 165 bps spread.

The notes are unconditionally guaranteed by parent company Enterprise Products Partners LP.

Enterprise Products is a midstream energy services provider based in Houston.

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