Morning Commentary: Westpac Banking to sell 10-year notes; Capital One offering on tap

By Cristal Cody

Tupelo, Miss., Jan. 23 – Investment-grade deal action slowed early Thursday with just two reported issuers offering bonds in the primary market.

Westpac Banking Corp. plans to price subordinated notes due Feb. 4, 2030 that are initially talked to price with a spread in the low 150 basis points over Treasuries area, a source said.

Capital One NA is marketing two tranches of fixed-to-floating rate notes, a source said.

The deal includes notes due Jan. 27, 2022 that are initially talked to price with a spread in the Treasuries plus 65 bps area and a tranche of notes due Jan. 28, 2025 talked to print in the Treasuries plus 90 bps area.

More than $14 billion of investment-grade bonds have priced week to date.

About $20 billion to $25 billion of issuance was expected for the short market week.

New issues priced this week have traded flat to modestly tighter, a market source said.

Adobe Inc.’s $3.15 billion of fixed-rate notes (A2/A) brought to the market in four tranches on Wednesday improved about 1 bp to 3 bps.

The San Jose, Calif., computer software and services provider’s $1.3 billion tranche of 2.3% notes due Feb. 1, 2030 firmed to the 56 bps area in the secondary market.

The notes priced at a Treasuries plus 57 bps spread. Initial guidance was in the 80 bps over Treasuries area.

Secondary volume this week has included $24.43 billion of high-grade bonds traded on Wednesday and $19.15 billion of bonds traded on Tuesday. The bond markets were closed Monday for the Martin Luther King Jr. Day holiday.

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