Morning Commentary: Everest Reinsurance, Ameren, New England Power, Signature on tap

By Cristal Cody

Tupelo, Miss., Oct. 1 – A handful of companies offered new issues in the high-grade bond market as October kicked off on Thursday, according to market sources.

Everest Reinsurance Holdings, Inc. (Baa1/A-) is marketing two tranches of registered senior notes due in 2030 and 2050.

Union Electric Co., doing business as Ameren Missouri, intends to price $550 million of registered green first mortgage bonds due March 15, 2051 (A2/A) following investor deal calls on Wednesday.

Initial price talk is in the Treasuries plus 140 basis points area.

New England Power Co. (A3/A-) also plans to price a $400 million offering of 30-year senior notes in a Rule 144A and Regulation S transaction on Thursday after the company held fixed income investor calls in the previous session.

Initial price talk is in the Treasuries plus 155 bps area.

In other issuance expected, Signature Bank (Baa2//BBB+) is marketing $200 million of 10-year fixed-to-floating rate subordinated notes to price on Thursday.

The company held fixed income investor calls earlier in the week for the offering.

Corporate and sovereign, supranational and agency issuers have priced more than $17 billion of investment-grade notes week to date.

About $20 billion to $25 billion of issuance is expected by market participants this week.

October volume forecasts are mixed with market participants forecasting as little as $50 billion to as much as $100 billion of supply for the month.

Mondelez firms

In the secondary market, new issues priced this week are mixed.

Mondelez International, Inc.’s $1.25 billion of new and reopened notes (Baa1/BBB) that priced in two tranches on Wednesday were trading better than issuance, sources said.

The company’s 2.625% notes due Sept. 4, 2050 (Baa1/BBB) tightened nearly 10 bps to 126 bps bid.

Mondelez priced a $625 million add-on to the 2.625% notes on Wednesday at a 135 bps over Treasuries spread.

The company first sold $500 million of notes on Sept. 2 at a spread of 127 bps over Treasuries. The total outstanding is now $1,125,000,000.

Secondary market volume was heavy on Wednesday with $28.26 billion of investment-grade corporate bonds traded, compared to $20.96 billion on Tuesday and $18.9 billion on Monday, according to Trace.

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