Morning Commentary: Starbucks, RBS, Florida Power to price; Bristol-Myers offering eyed

By Cristal Cody

Tupelo, Miss., May 2 – Several issuers are expected to be in the high-grade primary bond market on Thursday following one deal in the previous session.

Starbucks Corp. is on deck with a $2 billion two-part offering of senior notes. One of the tranches will be designated as a green bond with proceeds to be used in financing or refinancing eligible sustainability projects.

Royal Bank of Scotland Group is offering fixed-to-floating rate notes due 2030.

Also, Florida Power & Light Co. plans to price floating-rate notes due May 6, 2022.

Investment-grade supply already totals more than $16 billion of bonds week to date, compared to the $15 billion to $20 billion of deal volume expected by market sources for the week.

Deal volume slowed on Wednesday as the Federal Reserve concluded its monetary policy meeting with rates left unchanged.

In other action, Bristol-Myers Squibb Co. kicks off a two-day round of fixed income investor calls on Thursday for a potential eight-tranche Rule 144A and Regulation S offering of dollar-denominated notes. The deal is expected to include 1.5-, two-, three-, five-, seven-, 10-, 20- and 30-year tranches, a source said.

T-Mobile U.S. Inc. also is continuing a roadshow that began on Tuesday and will end on May 8 for a bond offering to fund its acquisition of Sprint Corp. The deal size is projected in the mid-$30 billion range.

In the secondary market, new issues priced this week were mixed, a source said.

Boeing Co.’s $3.5 billion five-tranche offering of senior notes that priced on Tuesday traded about 1 basis point to 3 bps tighter on the shorter maturities to 1 bp to 2 bps softer on the longer-dated tranches.

With the light issuance in the high-grade primary market on Wednesday, secondary trading slowed to $18.4 billion, according to Trace data. On Tuesday, $26.21 billion of bonds were traded, while $17.58 billion traded on Monday.

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