Morning Commentary: Niagara Mohawk, CNH, Teck, AerCap, Arch offer bonds; issues mixed

By Cristal Cody

Tupelo, Miss., June 23 – Heavier investment-grade supply is expected on Tuesday with several issuers offering bonds at the start of the session, sources report.

Niagara Mohawk Power Corp. plans to price two tranches of senior notes (A3/A-), including 10-year notes initially talked to print in the Treasuries plus 150 basis points to 155 bps area and 30-year notes talked at the 185 bps to 190 bps spread area.

CNH Industrial Capital LLC is offering $500 million of new three-year notes (Baa3/BBB/BBB-) talked to price at the Treasuries plus 250 bps area.

Teck Resources Ltd. is on deck with a $500 million offering of 10-year notes with initial guidance in the Treasuries plus 375 bps area.

AerCap Ireland Capital DAC and AerCap Global Aviation Trust, which priced $1.25 billion of 6.5% guaranteed senior notes due July 15, 2025 (Baa3/BBB/BBB-) on June 3, is coming back to the primary market on Tuesday with a new issue.

The company is marketing long three-year guaranteed senior notes with price talk in the Treasuries plus 512.5 bps area.

Arch Capital Group Ltd., which held investor calls on Monday for a registered two-part offering of 10- and 30-year senior notes (Baa1/A-/BBB+), intends to price one tranche of notes on Tuesday. Initial price talk on a 10-year tranche is in the 250 bps over Treasuries area.

In other supply, UniCredit SpA (Baa1/BBB/BBB-) intends to price 15-year notes on Tuesday. Initial price talk is in the Treasuries plus 510 bps area.

Svenska Handelsbanken AB is marketing three-year notes (Aa2/AA-/AA+) to price at a spread in the 75 bps over Treasuries area.

Also on Tuesday, Municipality Finance plc (Aa1/AA+) launched a $1 billion offering of notes due Sept. 1, 2023 at mid-swaps plus 16 bps.

In other action, Exxon Mobil Corp. is offering euro-denominated notes in four tranches during the session.

Deal supply totals under $3 billion week to date following a handful of bonds priced on Monday from Abbott Laboratories, Canadian Natural Resources Ltd. and Duke Realty LP.

Brookfield Infrastructure Partners, LP postponed a $150 million of $25-par preferred limited partnership units (BBB-) due to market conditions on Monday.

Lighter volume of about $25 billion is expected this week following nearly $60 billion of issuance last week.

Abbott tightens

In the secondary market, new issues were mixed, a source said.

Abbott Laboratories’ $1.3 billion two-part offering of senior notes (A3/A-) firmed about 2 bps across both tranches.

The company sold $650 million of 1.15% notes due Jan. 30, 2028 at 99.37 to yield 1.237%, or a spread of 70 bps over Treasuries.

Initial price talk was in the 100 bps spread area.

The company’s $650 million of 1.4% notes due June 30, 2030 priced at 98.567 to yield 1.555%, or an 85 bps over Treasuries spread.

The notes were talked to print in the 115 bps spread area.

Canadian Natural Resources’ $1.1 billion of senior notes priced in two tranches on Monday traded flat to 3 bps wider than issuance.

The tranche of 2.05% notes due July 15, 2025 was wrapped around issuance in secondary trading.

Canadian Natural Resources (Baa2/BBB) sold $600 million of the five-year notes at 99.832 to yield 2.085%, or a spread of Treasuries plus 175 bps.

Initial price talk was in the 205 bps over Treasuries area.

Canadian Natural Resources’ $500 million of 2.95% notes due July 15, 2030 softened about 3 bps in secondary trading.

The notes priced at 99.955 to yield 2.955%, or Treasuries plus 225 bps.

The 10-year tranche was talked to price at the 255 bps spread area.

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