High-grade corporate bond supply winds down for year; FHLBank on tap; AbbVie firms

By Cristal Cody

Tupelo, Miss., Dec. 18 – Dollar-denominated corporate high-grade supply stayed quiet over Wednesday’s session.

One issuer, SmartCentres Real Estate Investment Trust, priced a C$450 million offering of 10-year senior debentures during the session in a Canadian private placement.

Coming up on Thursday, the Federal Home Loan Bank System plans to price a two-year Global note.

Corporate deal volume has been quiet so far week to date, except for a $50 million preferred stock offering on Tuesday, market sources report.

Based on December monthly syndicate forecasts, the balance of potential bond deal volume is an average $1 billion to $3 billion, a syndicate source said.

However, investment-grade corporate issuance is “effectively over” for the rest of the year with maybe some opportunistic issuers in the primary market before 2019 ends, the source said.

This week was forecast to see zero bond deal volume up to about $5 billion of supply, syndicate sources said.

The Markit CDX North American Investment Grade 33 index closed Wednesday mostly flat at a spread of 45.8 basis points.

In the secondary market, biopharmaceutical bonds priced in two of the year’s biggest deals remained better than issuance on Wednesday.

AbbVie Inc.’s 3.2% notes due Nov. 21, 2029 firmed about 1 bp on the day.

Bristol-Myers Squibb Co.’s 3.4% senior notes due July 26, 2029 improve nearly 1.5 bps during the session.

AbbVie improves

AbbVie’s 3.2% notes due Nov. 21, 2029 (Baa2/A-/) headed out on Wednesday about 1 bp tighter at 113 bps bid in secondary trading, a market source said.

The company sold $5.5 billion of the bonds at a Treasuries plus 130 bps spread on Nov. 12 as part of a $30 billion 10-tranche deal.

AbbVie is a biopharmaceutical company based in North Chicago, Ill.

Bristol-Myers firms

Bristol-Myers Squibb’s 3.4% senior notes due July 26, 2029 firmed more than 1 bp in secondary trading on Wednesday to 67 bps bid, a market source said.

Bristol-Myers sold $4 billion of the 10-year notes (A2/A+/) on May 7 at a Treasuries plus 105 bps spread as part of a $19 billion nine-tranche offering.

The biopharmaceutical company is based in New York.

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