Morning Commentary: Home Depot, Xilinx eye bond deals; Home Depot bonds mixed

By Cristal Cody

Tupelo, Miss., May 24 – Two issuers announced plans early Wednesday to tap the investment-grade primary market.

Home Depot Inc. is marketing three tranches of senior notes (//A) over the session.

Fitch Ratings estimated in a ratings release Home Depot’s deal size at up to $2 billion.

The deal includes two tranches of fixed-rate notes and one tranche of floating-rate notes.

Also, Xilinx, Inc. is offering senior notes.

Market activity is expected to be mostly quiet headed into the release later in the day of the minutes from the Federal Reserve’s last policy meeting, a source said. The Fed is widely expected to raise rates in June.

In secondary market activity early Wednesday, Home Depot’s bonds (A2/A/A) traded flat to modestly better.

Secondary trading volume rose to $20.73 billion on Tuesday from $16.45 billion on Monday, according to Trace.

Home Depot mixed

Home Depot’s 2.125% notes due Sept. 15, 2026 were quoted trading early Wednesday at 93.78, compared to where the notes went out on Tuesday at 93.75, a market source said.

The company sold $1 billion of the notes on Sept. 6 at 98.904 to yield 2.248% and a spread of 70 basis points over Treasuries.

Home Depot’s 3.5% notes due Sept. 15, 2056 were unchanged from Tuesday at 89.10 in the secondary market.

The company sold $1 billion of the notes on Sept. 6 at 98.097 to yield 3.59%, and a Treasuries plus 135 bps spread.

Home Depot is an Atlanta-based home improvement retailer.

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