Morning Commentary: Consolidated Edison offers debentures; lighter supply into July forecast

By Cristal Cody

Tupelo, Miss., June 21 – A couple of issuers announced plans for new bond deals in the high-grade primary market early Thursday.

Consolidated Edison Co. of New York, Inc. intends to price floating-rate debentures.

Also, Fannie Mae plans to sell new three-year Benchmark Notes.

Deal volume soared on Wednesday with more than $24 billion of bonds priced, including a $16 billion nine-tranche issue from Walmart Inc.

Walmart’s offering was much larger than the initial $10 billion first expected and higher than the later up to $14 billion of bonds expected, according to market sources.

High-grade secondary volume also jumped on Wednesday to $20.3 billion of trading volume, Trace reported. Secondary market volume totaled $13.91 billion on Monday and $18.06 billion on Tuesday.

More than $41 billion of bonds have priced week to date, with $31 billion of volume just from Walmart’s transaction and Bayer AG’s $15 billion eight-part sale of senior notes on Monday.

Syndicate sources forecasted about $35 billion to as much as $50 billion of supply over the week.

Heavy deal activity is expected to subside headed into the Independence Day holiday and from corporate earnings blackout periods, Hans Mikkelsen, an analyst with BofA Merrill Lynch, said in a note released Thursday.

“Then beginning the third week of July volumes accelerate seasonally starting with U.S. banks that will have just reported results,” he said.

JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. all report their second-quarter earnings results on July 13.

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