Morning Commentary: Cades, Council of Europe, European Investment, Franklin eye primary

By Cristal Cody

Tupelo, Miss., Oct. 14 – Sovereign, supranational and agency primary issuers are expected to make up the bulk of volume on Wednesday, while just one reported corporate issuer announced that it planned to offer high-grade bonds at the start of the session, sources reported.

Caisse d'Amortissement de la Dette Sociale (Aa2//AA) is on deck with a Rule 144A and Regulation S offering of dollar-denominated 10-year social bonds.

Initial price talk is in the mid-swaps plus 30 basis points area.

The Council of Europe Development Bank (Aa1/AAA/AA+) plans to tap the primary market with a dollar-denominated offering of three-year senior notes. The notes are talked to print in the mid-swaps plus 6 bps area.

In addition, the European Investment Bank (Aaa/AAA/AAA) intends to price its second dollar-denominated global sustainability awareness bond of the year on Wednesday.

The bank issued its first issue dollar-denominated global sustainability awareness bonds on May 12, when it priced $1 billion of 0.875% registered bonds due May 17, 2030 at 99.097 to yield 0.97%, or a spread of mid-swaps plus 31 bps.

Also in the SSA market, Freddie Mac announced plans to price a benchmark-sized offering of new three-year Reference Notes.

In corporate supply, Franklin Resources, Inc., which completed its acquisition of Legg Mason in July, was the lone reported issuer over the morning.

The company is marketing a benchmark offering of fixed-rate senior notes (A2/A) with proceeds slated for general corporate purposes, which may include redeeming, defeasing or retiring debt from the company or its subsidiaries, including Legg Mason Inc.’s junior subordinated notes.

In other corporate market action, Blackstone/GSO Secured Lending Fund is continuing the second round of fixed income investor calls on Wednesday for a Rule 144A and Regulation S offering of dollar-denominated senior notes (Baa3//BBB-).

Deal volume was light on Tuesday as the holiday-shortened market week kicked off with $3.35 billion of bonds sold from Toyota Motor Credit Corp. and Athene Global Funding.

Market participants expected about $15 billion to $20 billion of volume this week as focus shifts to quarterly earnings results from the big U.S. banks.

Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co. posted profit results on Wednesday, following earnings releases on Tuesday from JPMorgan Chase & Co. and Citigroup Inc. Morgan Stanley reports on Thursday.

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