Morning Commentary: Energy Transfer, PSE&G, Eversource, Autodesk, American Tower on tap

By Cristal Cody

Tupelo, Miss., Jan. 7 – The flurry of high-grade bond deals being marketed continued on Tuesday morning following more than $24 billion of volume on Monday.

Corporate and sovereign, supranational and agency supply is expected on Tuesday.

Several deals in the energy space were offered over the morning.

Energy Transfer Operating, LP plans to price three tranches of registered fixed-rate senior notes.

Public Service Electric and Gas Co. intends to sell two tranches of secured medium-term notes due Jan. 15, 2030 and Jan. 1, 2050.

Eversource Energy also intends to price $350 million of senior notes due 2050.

In other corporate issuance expected, Autodesk, Inc. plans to bring new fixed-rate notes to the primary market following global investor calls held Monday, according to an informed source and a 424B2 filing with the Securities and Exchange Commission.

Also, American Tower Corp. is offering registered senior notes due 2025 and 2030.

In SSA volume, Kommunalbanken AS launched a $750 million Rule 144A and Regulation S offering of two-year floating-rate notes at Libor plus 8 basis points on Tuesday, a source said.

The notes due Feb. 24, 2022 were initially talked to price in the Libor plus 9 bps area.

The European Investment Bank also launched a $4 billion offering of global notes due March 14, 2025 early Tuesday at mid-swaps plus 9 bps, according to a market source.

Initial price talk was in the mid-swaps plus 11 bps area.

In addition, on Tuesday, Landwirtschaftliche Rentenbank is marketing $500 million of notes.

Coming up on Wednesday, Fannie Mae announced plans to price a new five-year Benchmark Note offering.

Meanwhile, a two-tranche deal from Israel is being eyed on the investment-grade desks, a source said.

Israel is holding a global roadshow and fixed income investor calls for 10- and 30-year notes through Tuesday.

About $115 billion to $125 billion of investment-grade supply is forecast for January, according to syndicate sources.

Looking at the secondary market, new issues priced Monday were mixed, a source said.

Kroger Co.’s $750 million of 3.95% senior notes due Jan. 15, 2050 (Baa1/BBB) traded wrapped around issuance.

The Cincinnati-based grocery retailer priced the notes at 99.668 to yield 3.969% and a spread of Treasuries plus 170 bps.

Initial price talk was in the Treasuries plus 190 bps to 195 bps area.

Corporate secondary market volume totaled $17.6 billion on Monday, according to Trace data.

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