Thin high-grade market action likely for rest of year; Dominion Gas eases; Charter, Fox firm

By Cristal Cody

Tupelo, Miss., Dec. 17 – The investment-grade bond market continued to remain mostly quiet on Tuesday.

No reported issuers offered bonds and little volume is expected for the rest of the year, market sources report.

Dollar-denominated high-grade issuers stayed out of the primary market on Monday and Tuesday, while one issuer priced a preferred offering over Tuesday’s session.

Gabelli Multimedia Trust Inc. priced $50 million of 5.125% $25-par preferred shares in an offering upsized from $25 million, a source said.

This week is forecast to see zero bond deal volume up to about $5 billion of supply, syndicate sources said.

Historically, the final two weeks of December have posted $2 billion and $0 average issuance, respectively, according to a BofA Global research note released Monday.

The Markit CDX North American Investment Grade 33 index firmed modestly to end Tuesday at a spread of 45.8 basis points.

In the secondary market, energy bonds were mixed over the session.

Dominion Energy Gas Holdings, LLC’s 3% senior notes due Nov. 15, 2029 eased about 2 bps on Tuesday but have improved about 6 bps from a week ago.

In other secondary trading, Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050 reopened earlier in December were seen about 2 bps better on Tuesday.

Fox Corp.’s 4.709% notes due Jan. 25, 2029 priced at the start of the year ahead of its spin-off as a stand-alone company following Walt Disney Co.’s acquisition of 21st Century Fox America, Inc. firmed about 2 bps on the day. The notes are trading nearly 80 bps better than where the issue priced in January.

Dominion Energy softens

Dominion Energy Gas Holdings’ 3% senior notes due Nov. 15, 2029 (Baa1/BBB+/BBB+) softened about 2 bps to 118 bps bid on Tuesday, according to a market source.

The notes were seen at 124 bps bid a week ago on Dec. 10.

The company sold $600 million of the 10-year notes on Nov. 18 at a Treasuries plus 123 bps spread.

Dominion Energy Gas Holdings is a Richmond, Va.-based natural gas company and subsidiary of Dominion Energy Inc.

Charter improves

Charter Communications’ 4.8% senior secured notes due March 1, 2050 (Ba1/BBB-/BBB-) headed out on Tuesday about 2 bps tighter at 226 bps bid, according to a market source.

Subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. priced a $1.3 billion add-on to the issue on Dec. 2 at 101.964 to yield 4.677%, or a spread of Treasuries plus 240 bps.

Charter originally sold the notes in a $1.5 billion offering on Oct. 15 at 99.436 to yield 4.836% and a spread of Treasuries plus 260 bps. The total outstanding is now $2.8 billion.

The broadband communications company is based in Stamford, Conn.

Fox tightens

Fox’s 4.709% notes due Jan. 25, 2029 (Baa2/BBB/) firmed about 2 bps on the day to 112 bps bid, a market source said.

The company sold $2 billion of the 10-year notes on Jan. 15 at a Treasuries plus 200 bps spread.

The notes were priced as part of a $6.8 billion five-part offering to help fund a one-time dividend to the issuer’s parent predecessor company, 21st Century Fox America, to use to pay the tax liability when 21st Century Fox spun off its assets before it was acquired by Walt Disney.

Fox is a mass media company based in New York City.

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