Investment-grade primary action mostly quiet; Tyco taps market; credit spreads soften

By Cristal Cody

Tupelo, Miss., Jan. 25 – Activity stayed mostly muted in the investment-grade bond market on Monday a day ahead of the Federal Reserve’s two-day policy meeting.

Tyco Electronics Group SA sold $350 million of 3.7% 10-year senior notes at 99.757 to yield 3.729% on Monday.

The notes (Baa1/A-A-) priced with a spread of 170 basis points over Treasuries.

Alcentra Capital Corp. announced plans over the day to print an offering of 6.5% notes due Feb. 15, 2021 at the start of February.

The trade date for the Alcentra Capital InterNotes (Egan-Jones: A-) is set for Monday with settlement expected on Feb. 4.

Incapital LLC is the bookrunner.

Credit spreads softened over the session, and bonds were mixed in secondary trading.

The Markit CDX North American Investment Grade 25 index eased 2 bps to end at a spread of 107 bps.

In the secondary market, McDonald’s Corp.’s 3.7% bonds due 2026 firmed about 1 bp to 171 bps bid following the company’s report of an increase in fourth-quarter earnings but flat fiscal-year profit.

The company sold $1.75 billion of the notes (Baa1/BBB+/BBB+) on Dec. 2 at a spread of Treasuries plus 155 bps.

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