Morning Commentary: High-grade primary busy; Oracle, Kellogg, AutoNation, Japan Bank market notes

By Cristal Cody

Tupelo, Miss., Nov. 7 – The high-grade bond market is set for strong issuance on Tuesday with several companies planning to tap the primary market.

Oracle Corp. is marketing a five-tranche offering of notes.

Kellogg Co. intends to sell 10-year senior notes. The deal size is expected to be $600 million, according to Fitch Ratings.

AutoNation, Inc. plans a two-part sale of senior notes.

Also, Landwirtschaftliche Rentenbank is offering 10-year guaranteed notes, and Japan Bank for International Cooperation is marketing $4.5 billion of guaranteed bonds in three tranches, according to informed sources.

Deal action was busy on Monday with issuers that included Apple Inc.

Supply is expected to be strong going into the Thanksgiving Day holiday, according to market sources. About $30 billion of bond volume is forecast by market sources for this week.

Kellogg was last in the high-grade primary market one year ago on Nov. 7, 2016 with $600 million of 2.65% notes due Dec. 1, 2023. The notes (Baa2/BBB/BBB) priced at 99.91 to yield 2.664% and with a spread of Treasuries plus 107 basis points.

The 2.65% notes were not active in secondary trading over the morning, a source said. The issue was last seen at 100.14 on Monday, up from 99.73 on Friday.

Secondary market volume totaled $14.08 billion on Monday, according to Trace.

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