Morning Commentary: UnitedHealth, Western Union eye bond deals; Burlington Northern weakens

By Cristal Cody

Tupelo, Miss., March 8 – Several investment-grade bond issuers announced plans on Wednesday to tap the primary market.

UnitedHealth Group Inc. is marketing two tranches of notes.

Realty Income Corp. is offering new 30-year notes and an add-on to its 4.125% notes due 2026.

DTE Energy Co. is in the deal pipeline with an offering of senior notes.

Western Union Co. also plans to price new notes.

The three-month Libor yield rose 1 basis point to 1.11% on Wednesday, a market source said.

In the secondary market, Burlington Northern Santa Fe, LLC’s $1.25 billion of senior debentures (A3/A) that priced in two parts on Monday continued to soften on Wednesday.

Secondary trading volume in the high-grade bond market totaled $20.93 billion on Tuesday, down from $22.67 billion on Monday, according to Trace.

Burlington Northern softens

Burlington Northern Santa Fe’s 3.25% debentures due June 15, 2027 softened modestly in secondary trading early Wednesday to 99.48 from where the notes went out in the previous session at 99.81, according to a market source.

The company priced $500 million of the debentures on Monday at 99.747 to yield 3.278%, or a spread of Treasuries plus 78 bps.

Burlington Northern Santa Fe’s 4.125% debentures due June 15, 2047 weakened more than 1 point to 96.97 over the morning. The notes headed out on Tuesday at 98.49.

The $750 million tranche priced on Monday at 98.857 to yield 4.191%, or Treasuries plus 108 bps.

The holding company for railroad transportation subsidiaries is based in Fort Worth, Texas.

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