Viacom deal caps robust week of high-grade issuance; bank names widen in secondary market

By Aleesia Forni and Andrea Heisinger

New York, Nov. 16 - One investment-grade bond deal - from Viacom Inc. - priced on Friday to cap a week of more than $32 billion in issuance.

Viacom sold $250 million of 30-year bonds in a private sale.

Investor demand for high-grade paper has dropped off slightly in the past week, a source said.

"It could be fatigue, or something else," he added.

There is talk of a slowdown between Thanksgiving and Christmas, although "people still need to price things before the end of the year, so I don't know how slow," the source said.

On Friday morning, a buyside source pegged the coming shortened week ahead of Thanksgiving at having $10 billion to $15 billion in new bonds pricing.

"There are really only a couple of days to get things done, so Monday and Tuesday could get busy," he said.

After the close, a source at a large syndicate desk said there is $5 billion to $10 billion in deals expected for the coming week.

There was a bit of a bump in the market on Friday amid talk of a solution to the fiscal cliff, although rising tensions in the Middle East could offset that if it continues in the next week.

"I don't know who the idiots are who really think Congress is getting anything done about the fiscal cliff," a market source said in early afternoon. "I'll believe it when I see it."

In bank paper, issues from JPMorgan, Bank of Nova Scotia and Merrill Lynch were seen weaker in trading on Friday.

JPMorgan's notes due 2019 were 1 basis point wider, while Bank of Nova Scotia's 1.85% notes due 2015 widened 3 bps.

The 6.875% notes due 2018 from Merrill Lynch weakened 9 bps.

Viacom's bonds

New York-based entertainment company Viacom priced $250 million of 4.375% 30-year senior bonds (Baa1/BBB+/BBB+) at a spread of Treasuries plus 178 bps, an informed source said.

Pricing was done under Rule 144A and Regulation S.

Citigroup Global Markets Inc., Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Viacom last priced bonds in a $400 million sale in two maturities on June 7.

The entertainment company is based in New York City.

JPMorgan wider

The secondary market saw the $3 billion 6.3% issue from JPMorgan due 2019 widen 1 bp from levels seen earlier in the week to 78 bps bid.

JPMorgan priced the 10-year bonds on April 16, 2009 at 305 bps over Treasuries.

Nova Scotia notes weaken

Also in the secondary, Bank of Nova Scotia's 1.85% notes due 2015 were 3 bps wider on Friday at 36 bps bid, according to a market source.

The bank priced the $1 billion issue at 147 bps over Treasuries in January 2012.

Merrill Lynch widens

Merrill Lynch's 6.875% notes due 2018 widened 9 bps to 234 bps bid near the end of New York's session.

On April 22, 2008, the bank priced $5.5 billion 10-year notes at 320 bps over Treasuries.

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