Morning Commentary: BlackRock, Main Street Capital, Ontario on deck; Citigroup firms

By Cristal Cody

Tupelo, Miss., April 17 – BlackRock Inc., Main Street Capital Corp. and the Province of Ontario announced plans early Wednesday to tap the high-grade primary market with new issues.

BlackRock plans to price fixed-rate notes.

Main Street Capital is marketing fixed-rate notes.

Ontario also is offering fixed-rate bonds.

Meanwhile, Federal Home Loan Bank System announced it plans to skip issuing or reopening a global note on Wednesday. FHLBanks’ next bond pricing opportunity is May 7.

Volume is expected to be thin after Wednesday with the bond markets scheduled to close early at 2 p.m. ET on Thursday and remain closed on Friday for the Good Friday holiday.

Week to date, corporate issuers have priced $12.45 billion of high-grade notes.

Walmart Inc. leads the week’s deal volume so far with a $4 billion three-part offering of fixed-rate senior notes that priced on the tight side of guidance on Tuesday.

Bank and financial issuance also remains in the forefront on the heels of earnings releases, source report.

Citigroup Inc. and JPMorgan Chase & Co. tapped the primary market on Tuesday following earnings releases.

Morgan Stanley released its first-quarter earnings before the market opened on Wednesday.

About $10 billion to $15 billion of supply for the week was forecast by syndicate sources.

In the secondary market, new financial paper traded mostly flat to tighter after issuance, a source said.

Citigroup’s $2.75 billion of 3.325% senior notes due April 24, 2025 (A3/BBB+/A) improved about 1 basis point from where the notes priced Tuesday at a spread of Treasuries plus 95 bps.

Initial price talk was in the Treasuries plus 110 bps area.

JPMorgan Chase’s $1.5 billion reopening of 3.964% senior fixed-to-floating rate notes due Jan. 15, 2048 (A2/A-/AA-) firmed about 1 bp.

The notes priced at a spread of Treasuries plus 115 bps on Tuesday.

Price talk was in the Treasuries plus 120 bps spread area.

The notes convert Nov. 15, 2047 to a floating rate of Libor plus 138 bps.

JPMorgan originally issued $1.75 billion of the notes on Nov. 10, 2017 at a spread of Treasuries plus 115 bps and issued a $250 million add-on to the notes on Dec. 12, 2017. The total outstanding now is $3.5 billion.

Secondary market volume rose to $20.37 billion on Tuesday from $17.3 billion on Monday, according to Trace data.

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