Edison prices tighter than talk; high-grade supply thin on looming Fed decision; spreads firm

By Cristal Cody

Tupelo, Miss., June 18 – High-grade primary action slowed on Tuesday as the Federal Reserve kicked off its two-day monetary policy meeting.

Edison International sold $600 million of 5.75% senior notes due June 15, 2027 at par to yield 5.75%, tighter than initial talk in the 6% area.

In other supply news, Toronto-Dominion Bank priced C$1.75 billion of fixed-to-floating-rate medium-term notes on Tuesday.

High-grade issuers priced more than $4 billion of bonds over Monday’s session.

Supply was eyed to thin this week due to heavier-than-expected volume over the previous two weeks and the Federal Reserve’s monetary policy decision due on Wednesday, sources said.

Market sources do not anticipate a rate cut following the June meeting but expectations are growing for a possible rate cut at the Fed’s July 30-31 meeting.

About $15 billion to $20 billion of investment-grade corporate issuance is forecast by market sources this week with some expecting as little as $10 billion of volume.

Meanwhile, spreads tightened on Tuesday. The Markit CDX North American Investment Grade 32 index firmed more than 2 basis points to end at a spread of 58 bps.

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