NY Life sells bonds as month approaches $100 billion mark; secondary sees 'positive' tone

By Aleesia Forni and Andrea Heisinger

New York, Sept. 21 - There was a sole deal in the high-grade bond market on Friday, from New York Life Insurance Global Funding. The issue ended a robust week of issuance.

NY Life priced $300 million of two-year floating-rate notes in a private sale.

Meanwhile, a report from Standard & Poor's out on Friday stated that the investment-grade composite spread has narrowed while breaking down those moves by sector.

There is "another $20 billion week" coming up to end the month of September, one source said late Friday.

"It's looking pretty front loaded. I think we're going to pass the $100 billion mark for the month," the source said.

Most of the supply is expected on Monday and Tuesday ahead of the Yom Kippur holiday, although some issuers are intentionally waiting until Thursday to look into pricing notes, sources said.

There is also a "busy economic calendar" in the coming week, a syndicate source said.

Earnings blackouts will be starting, which is another reason why September as a whole has been busy.

"It looks like October will have a slowdown," the syndicate source said. "It's a good thing to give the market a chance to digest."

One trader remarked that the secondary market's tone was "slightly positive" on Friday.

Thursday's issuances from Schneider Electric SA and Ford Motor Credit Co. both tightened in the secondary.

"Overall, [spreads were] mostly unchanged," the trader added.

NY Life's floaters

New York Life Insurance Global Funding was in the market with a $500 million deal of two-year floaters, a market source said.

The size of the offering was increased from $300 million.

The notes (Aaa/AA+) were priced at par to yield Libor plus 4 bps.

Barclays, HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC were bookrunners.

The unit of mutual insurance company New York Life Insurance Co. is based in New York.

S&P sees spreads narrow

In a report out Friday, Standard & Poor's said that its investment-grade composite spread has narrowed by 2 bps to 193 bps as of Thursday.

Spreads of bonds with ratings of AA and BBB tightened by 2 bps each to 131 bps and 236 bps, respectively, while the A spread narrowed by 3 bps to 166 bps, according to the report.

Financial institutions and telecommunications sectors moved tighter by 1 bp each to 275 bps and 289 bps, respectively.

The banking sector moved in by 2 bps to 267 bps with industrial and utility spreads tightening by 3 bps to 271 bps and 204 bps, respectively, S&P said in the report.

The report also notes that the high-grade composite spread is down from the highs reached last October and below both its one-year moving average of 213 bps and its five-year moving average of 246 bps.

Ford tightens

Ford Motor Credit's $1 billion of 4.25% 10-year notes firmed 23 bps to 237 bps bid, 234 bps offered on Friday.

The notes priced on Thursday at 260 basis points over Treasuries.

The financing arm of Ford Motor Co. is based in Dearborn, Mich.

Schneider firms

Schneider Electric's $800 million 2.95% 10-year notes traded at 118 bps bid, 115 bps offered, a trader said.

The notes were sold at a spread of 120 basis points over Treasuries on Thursday.

The energy management company is based in Rueil-Malmaison, France.

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