Morning Commentary: CVS, Humana, EPR, Welltower, Hartford, PSE&G, Magellan in queue

By Cristal Cody

Tupelo, Miss., Aug. 8 – Investment-grade bond supply opened Thursday on a strong note with a number of deals spread across several industries in the works.

CVS Health Corp. is marketing three tranches of senior notes due 2024, 2026 and 2029.

Humana Inc. plans to price two tranches of notes due 2029 and 2049.

EPR Properties is offering 10-year senior notes in the primary market after the company held fixed income investor calls on Monday.

Welltower Inc. is on deck with a two-part offering, including a tap of its 3.625% notes due March 15, 2024 and a new issue due 2030.

Hartford Financial Services Group, Inc. expects to price new 10- and 30-year senior notes.

In the energy sector, Public Service Electric and Gas Co. intends to price 30-year secured medium-term notes.

Magellan Midstream Partners, LP is offering $500 million of senior notes due 2050.

Also, DTE Energy Co. plans to price $675 million of series 2016C senior notes due 2024 in a remarketing. The notes were first issued in October 2016 as part of its equity units.

The deal is the second high-grade remarketing in the primary market this week. On Monday, NextEra Energy Capital Holdings Inc. priced a $1.5 billion remarketing of two-year debentures that were originally issued in August 2016 as part of NextEra Energy, Inc.'s equity units.

High-grade issuers already have sold more than $26 billion of bonds week to date.

About $25 billion to $30 billion of issuance was expected by syndicate sources for the week.

Deal volume so far has been led by Occidental Petroleum Corp.’s $13 billion 10-tranche offering of senior notes on Tuesday.

New issues priced this week are trading mostly tighter in the secondary market, a source said.

McDonald’s Corp.’s $2 billion of senior medium-term notes (Baa1/BBB+) that priced in two tranches on Wednesday firmed about 4 basis points to 5 bps.

The Chicago-based fast food chain’s $1 billion tranche of 3.625% notes due Sept. 1, 2049 tightened 5 bps in the secondary market. The notes priced at a Treasuries plus 150 bps spread.

Secondary market volume rose to $19.5 billion on Wednesday, compared to $18.22 billion on Tuesday and $15.09 billion on Monday, according to Trace data.

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