High-grade issuers Toyota, CBOE, Gladstone, Charles Schwab offer notes; Nasdaq, CVS mixed

By Cristal Cody

Tupelo, Miss., Dec. 8 – High-grade primary action continued on Tuesday following more than $11 billion of supply on Monday.

Toyota Motor Credit Corp. priced $2.75 billion of medium-term notes (A1/A+/A+) in two tranches, including $2 billion of floating-rate notes due Dec. 13, 2021 and $750 million of floating-rate notes due June 13, 2022.

CBOE Global Markets, Inc. sold $500 million of 10-year senior notes (A3/A-/) during the session.

Gladstone Capital Corp. tapped the primary market with $100 million of registered notes due Jan. 31, 2026 (Egan-Jones: A-) on Tuesday.

Charles Schwab Corp. also offered two tranches of fixed-rate senior notes (A2/A/A), as well as fixed-rate reset perpetual preferred stock (Baa2/BBB/BBB-), following fixed income investor calls in the prior session.

Week-to-date volume totals more than $14 billion.

About $15 billion to $20 billion of high-grade bonds are anticipated to price over the week, according to syndicate sources.

Supply was strong out of the gate on Monday with $11.45 billion of new notes from issuers including CVS Health Corp., Morgan Stanley and Nasdaq, Inc.

New issues mixed

In the secondary market, new issues were mixed with Nasdaq’s notes trading about 4 basis points tighter on the short end and about 1 bp softer on the 10- and 20-year tranches, a source said.

Nasdaq sold $1.9 billion of senior notes (Baa2/BBB/) in three tranches, including $600 million of 0.445% notes due Dec. 21, 2022 at par to yield a 30 bps over Treasuries spread.

Initial price talk was at the Treasuries plus 70 bps area.

Nasdaq priced $650 million of 1.65% notes due Jan. 15, 2031 with a 75 bps over Treasuries spread, compared to talk at the 110 bps over Treasuries area.

The company’s $650 million of 2.5% notes due Dec. 21, 2040 priced at par to yield a spread of 80 bps over Treasuries.

The notes were initially guided at the 115 bps spread area.

CVS Health’s $2 billion of new and reopened senior notes (Baa2/BBB/) priced in two tranches on Monday traded about 2 bps better than issuance on the add-on, while the new issue was unchanged.

The company priced a $750 million tap of its 1.3% notes due Aug. 21, 2027 at a spread of Treasuries plus 67 bps.

Initial guidance was at the 85 bps to 90 bps over Treasuries area.

The company first sold $1.5 billion of the 1.3% notes on Aug. 12 at a Treasuries plus 85 bps. The total outstanding is now $2.25 billion.

CVS Health’s new $1.25 billion tranche of 1.875% notes due Feb. 28, 2031 priced with a spread of Treasuries plus 95 bps.

The notes were talked to price with a spread in the Treasuries plus 120 bps area.

High-grade corporate secondary trading volume totaled $22.99 billion on Monday, according to Trace.

Credit spreads steady

Market tone was mixed in the high-grade space over the day.

The iShares iBoxx Investment Grade Corporate Bond ETF declined 0.12% to $136.96.

The PIMCO Investment Grade Corporate Bond index softened 0.22% to $116.32.

The Markit CDX North American Investment Grade 35 index was mostly unchanged at a spread of 50.84 bps on Tuesday.

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