New York Life prices bonds, Fidelity National plans issue; Goldman sharply tighter; NBC firm

By Andrea Heisinger and Cristal Cody

New York, April 29 - New York Life Global Funding was the only entrant in to the high-grade bond market on Thursday as issuance continued to wind down for the week.

The arm of the life insurance company sold an upsized $750 million of five-year notes. The deal was increased in size from an earlier $500 million and priced at the tight end of talk.

Fidelity National Financial, Inc. is planning a sale of seven-year senior unsecured notes, with pricing scheduled for Friday, a source said.

New deals are not expected to be plentiful on Friday to end the week and month of April.

One source commented that "it should pick up a little next week" as more companies come out of earnings blackout.

In secondary trading, Goldman Sachs Group Inc.'s outstanding bonds tightened on Thursday. In fact, the New York-based bank's notes due 2020 firmed more than 30 bps, according to a source.

Also in the secondary, the new 10-year notes from NBC Universal Inc. that were sold on Tuesday firmed in trading, a market source said.

The CDX Series 14 North American high-grade index ended 5 bps tighter at a mid bid-asked spread level of 89 bps, according to a source.

Overall Trace volume slipped about 6% to about $13 billion, a market source said.

Elsewhere, Treasury prices rose after the federal government wrapped up its sales for the week with an auction of $32 million of seven-year notes.

The yield on the five-year Treasury note was 5 bps tighter at 2.45%. The yield on the 10-year benchmark Treasury note firmed 3 bps to 3.73%, and the yield on the 30-year Treasury bond tightened 4 bps to 4.59%.

New York Life upsizes

New York Life Global Funding priced an upsized $750 million of 3% five-year notes (Aaa/AAA) to yield Treasuries plus 58 bps, a market source said.

The deal was increased from an initial $500 million and priced at the tight end of guidance in the 60 bps area. It was sold under Rule 144A.

Bookrunners were Barclays Capital, Goldman Sachs & Co. and J.P. Morgan Securities.

The arm of the life insurance company is based in New York City.

Primary mixed on earnings, fears

New deals remained muted for the day as fears about the fate of Greece continue and the high-grade market monitored the financial reform talks in Congress.

The tone was stronger by the end of the previous day, and remained so on Thursday.

"I don't think anything changed," a market source said.

With only one deal in the market, it was difficult to tell if anything had happened with spreads, he said.

There is one new deal on tap for Friday, with syndicate desks "playing catch up" before the end of the month, the source said.

Fidelity National plans bond sale

Fidelity National Financial announced a sale of seven-year senior unsecured notes (Baa3/BBB-), with pricing scheduled for Friday, a source close to the deal said.

Bookrunners are Bank of America Merrill Lynch and J.P. Morgan Securities.

Proceeds are being used to repay borrowings under a revolving credit facility, without a reduction to the company's commitment under it.

The insurance holding company is based in Jacksonville, Fla.

Goldman trades strongly

Goldman's bonds tightened notably in secondary trading, according to sources.

The 5.375% notes due 2020 firmed more than 30 bps to 167 bps early on Thursday, a source said.

The 10-year notes were seen late Wednesday 18 bps to 20 bps firmer at 202 bps bid, 199 bps offered.

The advances mark a second day of stronger activity. Goldman's notes had nearly daily moved out after the Securities and Exchange Commission filed civil fraud charges on April 16.

NBC Universal tighter

NBC Universal's new 5.15% notes due 2020 priced two days earlier were seen trading well early Thursday, a market source said.

The New York-based media and entertainment company sold $4 billion of senior unsecured notes (Baa2/BBB+) in five-year, 10-year and 30-year tranches on Tuesday.

The 10-year notes, which priced at Treasuries plus 148 bps, were quoted at 135 bps bid, 130 bps offered Thursday morning.

Bank CDS declines

A trader who follows the credit-default swaps market said that the cost of protecting holders of bonds issued by major banks like Bank of America, Citigroup and JP Morgan Chase against a possible event of default declined by between 6 bps and 21 bps on Thursday, a sign of increased investor confidence in the banking sector.

"Citigroup was a star," he said, quoting the New York banking giant's CDS cost as having come in by 20 bps to 155 bps bid, 165 bps offered.

He also saw the CDS costs for paper of major investment banking companies like Goldman Sachs and Morgan Stanley fall between 6 bps and 21 bps on the session, with Goldman's cost down by 21 bps at 128 bps bid, 133 bps offered.

Industrials, financials unaffected by Greek problems

Elsewhere in investment-grade, the problems with Greek and European debt did not dent high-grade bonds much, according to a research note on Thursday from Moody's Analytics analyst John Lonski.

"U.S. financial markets did not respond negatively to April 28's further widening of the spreads between Greek government debt and German government bonds to 1,780 bps at the 2-year maturity and to 827 bps for 10-year obligations," he said.

From Monday to Tuesday, the yield spreads of investment-grade corporate bonds widened from 109 bps to 112 bps for industrial companies and from 164 bps to 173 bps for financial companies, Lonski said.

"Nonetheless, Moody's average long-term investment-grade corporate bond yield - which shows a superior correlation with investment-grade corporate bond issuance - fell from April 26's 5.76% to April 27's 5.65% for its lowest reading since the 5.64% of December 2, 2009."

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