Morning Commentary: High-grade supply slows; Barclays, Ontario on deck; Vodafone mixed

By Cristal Cody

Tupelo, Miss., June 13 – High-grade primary action slowed early Thursday after a week of strong issuance that beat market forecasts.

Just two reported issuers marketed new dollar-denominated deals at the start of the session.

Barclays plc plans to bring a fixed-to-floating rate subordinated note (Baa3/BBB/A) offering.

In sovereign, supranational and agency supply, the Province of Ontario (Aa2/AA-) intends to price dollar-denominated seven-year global notes.

The notes due June 15, 2026 were initially talked to print in the mid-swaps plus 40 basis points area.

Week to date, high-grade corporate deal volume totals more than $27 billion following about $6 billion of supply on Wednesday, more than $4 billion of issuance on Tuesday and over $17 billion of volume on Monday.

SSA supply totals more than $7 billion week to date.

About $20 billion to $25 billion of issuance was expected by syndicate sources for the week.

Deal volume has been led by Fiserv, Inc.’s $9 billion four-part offering of senior notes that priced on Monday.

In the secondary market, new issues are mostly tighter, a market source said.

Vodafone Group plc’s $2.25 billion of notes (Baa2/BBB+/BBB+) that priced in two tranches on Wednesday to fund cash tender offers were mixed.

The London-based telecommunications company’s 4.875% notes due June 19, 2049 edged tighter in secondary trading, the source said. Vodafone sold $1.75 billion of the notes at a spread of 237.5 bps over Treasuries. Price guidance was in the Treasuries plus 240 bps area, compared to initial talk at Treasuries plus 255 bps area.

Vodafone’s $500 million tranche of 5.125% notes due June 19, 2059 softened about 1 bp in the secondary market. The notes priced at a Treasuries plus 260 bps spread. Guidance was at Treasuries plus 260 bps, while the notes were initially talked to print in the Treasuries plus 275 bps area.

Overall secondary trading volume this week includes $20.27 billion of bonds traded on Wednesday, $22 billion on Tuesday and $17.64 billion on Monday, according to Trace data.

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