Morning Commentary: High-grade primary packed; Shell, Dominion, BBVA, Japan Bank on tap

By Cristal Cody

Tupelo, Miss., Sept. 10 – Investment-grade market participants geared up for a third consecutive session of strong supply on Thursday.

Numerous issuers are marketing bonds that are expected to price over the day or holding fixed income investor calls for potential upcoming supply, sources said.

Shell International Finance BV is marketing two tranches of senior notes (Aa2/AA-) that are guaranteed by Royal Dutch Shell plc.

Also in the energy space, Dominion Energy, Inc. is offering three-year floating-rate senior notes (Baa2/BBB/BBB+).

Meanwhile, BBVA USA intends to bring two tranches of fixed-rate senior preferred notes (Baa2/BBB+), including three- and five-year tranches. Fixed income investor calls for the offering were held last week.

Fidelity National Financial, Inc. plans to price new fixed-rate senior notes (Baa2/BBB).

Corporate Office Properties, LP intends to sell fixed-rate senior notes guaranteed by Corporate Office Properties Trust.

Universal Health Services, Inc. announced a Rule 144A and Regulation S offering of split-rated 10-year senior secured notes (B1/BBB-/BBB-) over the morning.

Independent Bank Group, Inc. plans to price fixed-to-floating rate subordinated notes due 2030 (Kroll: BBB+) following fixed income investor calls last week.

Also, other issuers are expected to price notes following fixed income investor calls.

Cox Communications Inc. is offering two tranches of senior notes (Baa2/BBB/BBB+) including 10- and 30-year tranches following deal calls on Wednesday.

Smithfield Foods, Inc. is marketing new split-rated fixed-rate senior notes (Ba1/BBB-/BBB) following investor calls on Wednesday.

Also, Suzano Austria GmbH is offering registered dollar-denominated global notes due in 2031 (BBB-/BBB-) and guaranteed by Suzano SA.

Meanwhile early Thursday, the Federal Home Loan Bank System priced $1 billion of five-year Global notes.

In other supply expected Thursday, Japan Bank for International Cooperation is expected to price dollar-denominated three-year guaranteed senior notes.

Initial price talk is at the mid-swaps plus 20 basis points area.

In addition, Oesterreichische Kontrollbank AG (Aa1/AA+) plans to bring a dollar-denominated offering of five-year global notes to the primary market over the day.

The notes are initially talked to price in the mid-swaps plus 15 bps area.

Investment-grade issuers already have priced about $40 billion of bonds over the past two sessions.

About $50 billion to $60 billion of deal volume was expected in the primary market following the Labor Day holiday.

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