High-grade supply heavy; Goldman, Phillips 66, Georgia-Pacific, Avolon price; pipeline fills

By Cristal Cody

Tupelo, Miss., Nov. 16 – Investment-grade issuers priced more than $9 billion of bonds in the primary market on Monday with supply expected to be strong over the week.

Goldman Sachs Group Inc. sold $2.5 billion of three-year senior notes (A3/BBB+/A) in two tranches, attracting more than $4 billion in final book orders.

Phillips 66 priced $1.75 billion of guaranteed senior notes (A3/BBB+/) in three tranches.

Georgia-Pacific LLC came by with $1.6 billion of notes (A3/A+/) in two tranches.

Avolon Holdings Funding Ltd. (Baa3/BBB-/BBB-) priced $1 billion of guaranteed senior notes due April 15, 2026 over the session.

Athene Global Funding sold $650 million of 10-year senior secured notes (/A/A) on Monday.

Guardian Life Global Funding priced $500 million of seven-year notes (Aa2/AA+/) in a deal upsized from $350 million.

Connecticut Light and Power Co., doing business as Eversource Energy, sold $400 million of five-year first and refunding mortgage bonds (A1/A+/A+) over the day.

Store Capital Corp. priced $350 million of 10-year senior notes (Baa2/BBB/BBB) on Monday.

Rochester Gas & Electric Corp. tapped the primary market with $200 million of 10-year first mortgage bonds (A1/A-/A).

In addition, Arizona Public Service Co. priced a $105 million reopening of its 2.6% senior notes due Aug. 15, 2029 (A2/A-/A) during the session.

In other issuance, Kommunalbanken AS (Aaa/AAA/) sold $500 million of two-year sustainable notes on Monday on top of talk.

NRG, BNG on deck

Meanwhile, NRG Energy, Inc. is expected to price $3.83 billion of debt securities in five high-grade and high yield tranches on Tuesday following fixed income investor calls on Monday, according to market sources.

The Rule 144A and Regulation S high-grade portion includes $1.465 billion of senior secured notes (Baa3/BBB-) in a five-year tranche, as well as seven-year notes be issued under NRG’s sustainability linked bond framework.

In addition, NRG special purpose vehicle Alexander Funding Trust intends to price $900 million of three-year pre capitalized trust securities (Baa3/BBB-).

Also on Tuesday, BNG Bank NV (Aaa/AAA/AA+) plans to price a $1 billion Rule 144A and Regulation S offering of five-year senior sustainable notes.

Deal volume is expected to be strong this week ahead of the Thanksgiving Day holiday next week, sources report.

About $25 billion to $30 billion of high-grade supply is forecast for the week.

Market tone was positive over the session on reported improvements in Covid-19 vaccine efforts.

The iShares iBoxx Investment Grade Corporate Bond ETF closed up 0.32% at $136.20.

The PIMCO Investment Grade Corporate Bond Index improved 0.25% to $115.73.

The Markit CDX North American Investment Grade 35 index ended the day more than 2 basis points tighter from Friday at a spread of 52.26 bps.

In the secondary market, Goldman Sachs’ new notes traded unchanged to 2 bps tighter on the fixed-to-floating-rate tranche, a source said.

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