Two utilities test the waters after shutout week
The IG new issuance market was shuttered all last week – the first week of no issuance since June 2022. In total, the market saw six consecutive days of no issuance (including Friday March 10th). This morning, however, the drought looks to be broken soon, as a couple of safe haven utility sector issuers are testing the waters - CenterPoint Energy Houston and Duke Energy Ohio.
Week over week, IG corporate spreads widened out 25bps to 162bps, but are off the mid-week high last week of 164bps. Meanwhile, high yield spreads widened 56bps to 517bps, week over week, after having reached a high of 520bps Wednesday.
With the expectations of $25bn last week, sources say if the market stabilizes, then pent up demand could make its way rapidly back into the IG new issuance markets. That said, issuers will need to navigate around Wednesday's closely watched FOMC meeting.
- Duke Energy Ohio plans a $TBA 2-part FMB (10y and 30y). Leads BNPP, Citi, PNC, Santander and TD. A2/A. Price talk +210bps and +235bps area.
- CenterPoint Energy Houston plans a $TBA 10y and 30y Green. Leads MUFG, CS, BofA , BNPP and RBCCM. A2/A/A. Price talk +180bps +200bps.