NWB, International Development sell notes; Kommuninvest demand strong; credit spreads tighten

By Cristal Cody

Tupelo, Miss., Nov. 24 – Corporate supply stayed quiet over Tuesday’s session, while a handful of sovereign, supranational and agency issuers tapped the high-grade primary market.

International Development Association (Aaa/AAA) priced a $2 billion Rule 144A and Regulation S offering of 10-year senior notes.

Nederlandse Waterschapsbank NV, or NWB Bank, sold $1 billion of five-year senior notes (Aaa/AAA/) during the session.

Also, Kommuninvest I Sverige AB (Aaa/AAA/) priced a $1 billion Rule 144A and Regulation S offering of notes due Aug. 9, 2023 in a deal that attracted more than $2.3 billion of interest.

Thin pricing action was expected over the Thanksgiving Day holiday week with up to about $5 billion of supply forecast, according to syndicate sources.

On Monday, Blackstone/GSO Secured Lending Fund was the sole reported corporate issuer in the high-grade primary market. The company priced a $300 million Rule 144A and Regulation S reopening of its 3.625% senior notes due Jan. 15, 2026 (Baa3//BBB-) in a deal upsized from $150 million.

Also on Monday, Fannie Mae sold $3.5 billion of new three-year Benchmark Notes.

Market tone was mostly positive on Tuesday with stock indexes all up more than 1% on continued headway for a Covid-19 vaccine and on the green light for president-elect Joe Biden’s formal transition to the presidency in January to proceed.

Credit spreads tightened 2.52 basis points on Tuesday after closing Monday 2.29 bps tighter.

The Markit CDX North American Investment Grade 35 index ended the day at a spread of 51.77 bps.

The PIMCO Investment Grade Corporate Bond index declined 0.32% to $116.37.

The iShares iBoxx Investment Grade Corporate Bond ETF also softened 0.23% to $137.43.

In other activity on Tuesday, FirstEnergy Corp. was dropped to pure junk by Moody’s Investors Service following downgrades from S&P Global Ratings in October and Fitch Ratings on Friday. The energy holding company has accessed about $2 billion under its revolving credit facilities this year.

FirstEnergy tapped the high-grade primary market twice in 2020, mostly recently on June 3 when it priced a $750 million two-part offering of senior notes (now rated Ba1/BB/BB+).

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