Morning Commentary: Primary supply heavy; Thermo Fisher, BP mostly flat; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., Sept. 15 – Investment-grade supply is expected to remain heavy on Thursday with at least eight issuers marketing bond deals.

Kite Realty Group, LP, Arizona Public Service Co., Delphi Automotive plc, Pitney Bowes Inc., Gilead Sciences, Inc., Agilent Technologies, Inc. and Ingredion Inc. are in the deal pipeline.

In the secondary market, Thermo Fisher Scientific Inc.’s $1.2 billion issue of 2.95% senior notes due 2026 that priced on Wednesday traded flat to 1 basis point tighter than issuance.

BP Capital Markets plc’s 3.017% guaranteed notes due 2027 were flat to 1 bp better than where the bonds priced on Tuesday.

The Markit CDX North American Investment Grade index opened about 2 bps tighter to a spread of 75 bps.

The three-month Libor yield was down 1 bp to 85 bps early Thursday.

On Wednesday, $16.96 billion of investment-grade issues were traded, compared to $15.79 billion on Tuesday and $12.55 billion on Monday, according to Trace.

Thermo Fisher mostly flat

Thermo Fisher Scientific’s 2.95% notes due 2026 traded flat to 1 bp tighter at 139 bps offered, according to a market source.

Thermo Fisher Scientific sold $1.2 billion of the notes (Baa2/BBB/BBB) on Wednesday at a spread of 140 bps over Treasuries.

The science technology company is based in Waltham, Mass.

BP mostly unchanged

BP Capital Markets’ 3.017% notes due 2027 traded mostly unchanged to 1 bp better at 129 bps offered, a market source said.

BP Capital Markets sold $1 billion of the long 10-year notes (A2/A-) on Tuesday at par with a spread of 130 bps over Treasuries.

BP Capital Markets is a financing arm of London-based oil and gas company BP plc.

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