Morning Commentary: T-Mobile, Ross, United Airlines, Honda, Penske, Denmark on deck

By Cristal Cody

Tupelo, Miss., Oct. 19 – Deal volume is expected to be strong over Monday’s session with several high-grade issuers offering bonds, sources report.

T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc. opened the week with a four-part Rule 144A and Regulation S offering of senior secured notes (Baa3/BBB-/BBB-) that includes two new issues.

T-Mobile is marketing new notes due Nov. 15, 2031 with price talk at the Treasuries plus 175 basis points area and new 40-year notes at the Treasuries plus 230 bps area.

T-Mobile also plans to price add-ons to its 3% notes due Feb. 15, 2041 and its 3.3% notes due Feb. 15, 2051.

The 2041 reopening is talked to price at the Treasuries plus 185 bps area, while the 2051 add-on is guided at the 210 bps over Treasures area.

T-Mobile first sold $1.25 billion of the 2041 notes on Sept. 22 at a spread of 160 bps over Treasuries.

The company originally sold $1.5 billion of the 2051 notes in the Sept. 22 transaction at a 187.5 bps over Treasuries spread.

Also on Monday, Ross Stores, Inc. is marketing two tranches of senior notes (A2/BBB+).

The company is offering notes due April 15, 2026 with price talk in the Treasuries plus 100 bps area and notes due April 15, 2031 that are talked to print in the 150 bps over Treasuries area.

United Airlines, Inc. is marketing $3 billion of class A pass-through certificates (A3/A) that have a seven-year tenor and a 4.1-year weighted average life during the session.

Canadian Imperial Bank of Commerce is on deck with $500 million of five-year green senior notes (A2/BBB+/AA-). Initial price talk is in the Treasuries plus 85 bps area.

Also, American Honda Finance Corp. expects to bring dollar-denominated medium-term notes due Jan. 21, 2022 (A3/A-) to the primary market on Monday. Initial price talk is at the Treasuries plus 45 bps area.

In addition, Penske Truck Leasing Co., LP is offering $500 million of senior notes due Nov. 15, 2025 (Baa2/BBB/BBB+) with price talk at the Treasuries plus 120 bps area.

Meanwhile, the Kingdom of Denmark (Aaa/AAA/AAA) intends to tap the primary market on Monday. Denmark is offering dollar-denominated notes due Oct. 27, 2022 with price talk in the mid-swaps plus 5 bps area.

High-grade supply ramped up on Friday with $10 billion of notes priced from Bank of America Corp., Morgan Stanley and Blackstone/GSO Secured Lending Fund.

The issuance pushed last week’s corporate volume to about $15 billion, in addition to $8 billion of notes priced from sovereign, supranational and agency issuers.

As little as $5 billion to about $15 billion of high-grade supply is expected this week, according to syndicate sources.

Market tone was soft early in the session. The Pimco Investment Grade Corporate Bond index declined 0.12% to 115.12.

The iShares iBoxx Investment Grade Corporate Bond ETF slipped 0.16% to $135.13.

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