Morning Commentary: Broadcom, Clorox, Berkley, Barclays, Ryder, QBE, NextEra on tap

By Cristal Cody

Tupelo, Miss., May 5 – The high-grade primary market remained busy at the start of Tuesday’s session with several issuers offering bonds, sources said.

The day’s biggest deal is expected from Broadcom Inc., which is marketing four tranches of guaranteed senior notes (Baa3/BBB-/BBB-) in a Rule 144A and Regulation S offering.

Broadcom’s deal includes long three-year notes with initial price talk in the Treasuries plus 225 bps area, long five-year notes talked at the 295 bps spread area, long 10-year notes talked at the 365 bps spread area and long 12-year notes talked at the 380 bps over Treasuries area.

Meanwhile, Clorox Co. is offering $500 million of 10-year senior notes (Baa1/A-) with initial price guidance in the Treasuries plus 170 bps area.

W. R. Berkley Corp. is marketing $300 million of 30-year senior notes (Baa1/BBB+/A-) on Tuesday. Initial price talk is in the Treasuries plus 312.5 bps area.

Other issuers expected on Tuesday include Barclays Bank plc, which plans to price registered senior notes due May 12, 2022 (A1/A+) on Tuesday. Initial price talk is at the Treasuries plus 200 bps area.

Ryder System, Inc. is on deck with an offering of long five-year medium-term notes (Baa1/BBB+/A-) with initial price guidance in the 330 bps over Treasuries area.

Australia’s QBE Insurance Group Ltd. (Baa2/BBB-) is in the primary market with an offering of five-year notes talked at the 6.5% area.

NextEra Energy Capital Holdings Inc. intends to tap the primary market with new guaranteed 10-year debentures (Baa1/BBB+/A-) that are talked to print in the 162.5 bps over Treasuries area.

In addition, Cheniere Energy Partners, LP subsidiary Sabine Pass Liquefaction, LLC intends to price new 10-year senior secured notes (Baa3/BBB-/BBB-) after holding fixed income investor calls on Monday. Initial price talk is in the Treasuries plus 450 bps area.

More than $22 billion of investment-grade bonds were priced on Monday, led by Apple Inc.’s $8.5 billion four-part offering of notes.

About $60 billion to $75 billion of volume is expected by market participants this week.

In the secondary market, Apple’s new paper (Aa1/AA+) traded about 4 bps to 9 bps tighter than issuance, a source said.

Apple’s 1.65% notes due May 11, 2030 were seen at 106 bps area. The notes priced in a $1.75 billion tranche at 99.296 to yield 1.727% and a Treasuries plus 110 bps spread.

The 10-year notes were talked at the 130 bps spread area.

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