Synchrony Financial announces plans for $3 billion offering; Tyco stable; Credit Suisse firms

By Cristal Cody and Aleesia Forni

Virginia Beach, Aug. 1 – A slow week for the high-grade market wrapped up with no new deals pricing on Friday.

The Federal Reserve’s Federal Open Market Committee meeting on Tuesday and Wednesday, coupled with a weaker overall tone to the market, kept a lid on issuance during the week.

Friday’s session did see Synchrony Financial added to the forward calendar. The company announced plans to price a multi-part $3 billion offering of senior notes.

Around $7.9 billion of supply came to market during the week. Roughly half of that total priced on Monday.

Total issuance ultimately fell short of what sources had expected to be a $15 billion week.

The figure is also down sharply from the prior week’s total of $18.35 billion.

The latest week also rounded out what has been the slowest month for the primary market so far this year. Issuers priced $54.03 billion of new investment-grade paper during July, bringing the year-to-date issuance to $670.81 billion.

Also during the week, Lipper reported inflows of $952 million into corporate investment-grade funds for the week ended July 30, down from the prior week’s $1.59 billion of inflows.

High-grade funds have seen around $49 billion of inflows for the year to date.

Ford Credit Canada Ltd. had been expected to be in the primary market on Friday with a C$295 million offering of 2.1% senior notes due Dec. 1, 2016. Pricing details were not available by press time.

Investment-grade corporate bonds remained soft on Friday after widening in the previous session, market sources said.

The Markit CDX North American Investment Grade series 22 index eased 2 basis points to a spread of 66 bps.

Secondary trading was “OK but not wildly busy,” a trader said on Friday.

Trading had thinned by the afternoon, the trader said.

Tyco Electronics Group SA’s senior notes (Baa1/A-/A-) brought in Monday’s session remained better than issuance, a trader said.

The two tranches of senior notes reopened on Monday by Credit Suisse AG, New York branch headed out mostly tighter, according to a trader.

Synchrony eyes $3 billion

Synchrony Financial is planning to price $3 billion of senior notes in four tranches, according to an S-1/A filing with the Securities and Exchange Commission.

The notes will be sold in tranches due 2017, 2019, 2021 and 2024.

Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the bookrunners.

The senior co-managers are BNP Paribas Securities Corp., HSBC Securities (USA) Inc., Mizuho Securities, MUFG, RBC Capital Markets LLC, RBS Securities Inc., Santander Investment Securities Inc., SMBC Nikko and Societe Generale.

Banca IMI, BBVA Securities Inc., Blaylock Beal Van LLC, CastleOak Securities LP, Commerz Markets LLC, Credit Agricole, Fifth Third Securities Inc., ING Financial Markets LLC, Lebenthal Capital Markets, Loop Capital Markets LLC, Mischler Financial Group, Inc., Ramirez & Co. Inc. and Williams Capital Group LP are the co-managers.

Proceeds will be used to invest in liquid assets to further increase the size of the company’s liquidity portfolio.

Synchrony is a consumer financial services company based in Stamford, Conn.

Tyco steady

Tyco Electronics Group’s 2.35% notes due 2019 traded in “small pieces” around the 61 bps area, a trader said.

Tyco priced $250 million of the five-year notes at a spread of Treasuries plus 65 bps on Monday.

The company’s tranche of 3.45% notes due 2024 saw more activity over the morning but nothing by the afternoon, according to the trader.

The 10-year notes traded early Friday at 97 bps bid.

The company sold $250 million of the notes on Monday at Treasuries plus 100 bps.

The electronic components manufacturer is based in Luxembourg.

Credit Suisse improves

Credit Suisse’s 1.375% notes due 2017 traded better at 43 bps offered, according to a trader.

The company reopened the issue on Monday in a $750 million add-on at a spread of Treasuries plus 47 bps.

The original $1.75 billion offering of three-year notes priced at Treasuries plus 60 bps on May 22.

Credit Suisse’s 2.3% notes due 2019 headed out on Friday at 67 bps offered, the trader said.

The notes were reopened on Monday in a $750 million offering that priced at Treasuries plus 70 bps.

Credit Suisse originally sold $2 billion of the five-year notes on May 22 at Treasuries plus 80 bps.

The financial services company is based in Zurich.

Bank/brokerage CDS costs higher

Investment-grade bank and brokerage CDS prices were higher on Friday, according to a market source.

Bank of America Corp.’s CDS costs ended 3 bps wider at 77 bps bid, 81 bps offered. Citigroup Inc.’s CDS costs also widened 3 bps to 74 bps bid, 78 bps offered. JPMorgan Chase & Co.’s CDS costs rose 2 bps to 62 bps bid, 65 bps offered. Wells Fargo & Co.’s CDS costs widened 2 bps to 52 bps bid, 56 bps offered.

Merrill Lynch’s CDS costs closed were 3 bps higher at 80 bps bid, 84 bps offered. Morgan Stanley’s CDS costs ended 5 bps wider at 78 bps bid, 81 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 4 bps higher at 85 bps bid, 89 bps offered.

Paul Deckelman contributed to this review

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