Morning Commentary: High-grade issuers flood primary; Biogen, Emerson, Diageo on deck

By Cristal Cody

Tupelo, Miss., April 27 – High-grade issuers poured into the primary market early Monday with numerous bond offering, sources report.

Several issuers are marketing multiple tranches.

Air Products & Chemicals Inc. is offering five tranches of notes (A2/A). A five-year issue is initially talked to price in the Treasuries plus 155 basis points area; a seven-year note is talked at the 165 bps spread area; a 10-year tranche is guided to print in the 175 bps spread area; a 20-year bond is talked to print in the 180 bps spread area; and a 30-year bond is talked at the 190 bps spread area.

Biogen Inc. is offering three tranches of registered senior notes (Baa1/A-) on Monday after the company held fixed income investor calls on Friday.

The deal includes 10-year notes with initial price talk in the 195 bps over Treasuries area and 30-year notes talked at the 225 bps spread area.

Diageo Capital plc plans to price three tranches of registered notes during the session. Diageo’s tranche of long five-year notes is talked at the Treasuries plus 155 bps area; a 10-year note is talked at the 180 bps spread area; and a tranche of 12-year notes is talked at the 200 bps spread area.

Emerson Electric Co. also intends to bring three tranches of notes to the primary market on Monday. Emerson is offering seven- and 10-year notes with initial price talk in the Treasuries plus 180 bps area and 30-year notes talked at the 200 bps spread area.

Georgia-Pacific LLC expects to tap the primary market with three tranches of notes (A+). The company’s deal includes five-year notes with initial price talk in the 160 bps over Treasuries area; seven-year notes talked at the 175 bps spread area; and 10-year notes with initial guidance in the 180 bps spread area.

Meanwhile, several issuers are offering single-tranche bond deals on Monday.

Nationwide Mutual Insurance Co., which postponed a Rule 144A and Regulation S offering of dollar-denominated fixed-to-floating rate notes due April 30, 2060 on April 20 due to market conditions, is returning to the primary market on Monday with a 30-year issue.

Initial price talk is in the Treasuries plus 325 bps area.

Snap-on Inc. is offering $400 million of 30-year notes (//A) during the session. Initial price talk is in the Treasuries plus 220 bps to 225 bps area.

IDEX Corp. is marketing $500 million of 10-year notes (Baa2/BBB/BBB+) with initial guidance in the 300 bps over Treasuries spread area.

BlackRock Inc. plans to sell new long 10-year senior notes that are talked to print in the Treasuries plus 160 bps spread area.

Citizens Bank, NA intends to come by the primary market on Monday with new five-year senior notes. Initial price talk is in the Treasuries plus 210 bps area.

In addition, parent company Citizens Financial Group, Inc. is offering new 10-year notes that have initial price talk in the 270 bps over Treasuries area.

Meanwhile, Delta Air Lines, Inc. is expected to bring a split-rated offering of five-year senior secured first-lien bullet notes (Baa3/BB) talked in the 6.75% to 7% area on Monday.

The company held fixed income investor calls on Thursday.

Also, Kohl’s Corp. is offering $500 million of five-year notes (Baa2/BBB-/BBB-) talked at the low-to-mid 10% area.

Strong deal volume was anticipated this week with syndicate sources forecasting about $40 billion to $50 billion of new issuance.

Issuance may be front-loaded ahead of the Federal Reserve’s monetary policy meeting that begins on Tuesday and ends Wednesday, though no additional policy changes are expected, sources note.

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