Midday Commentary: Watson, MetLife prep deals; bonds improve in trading as demand remains high

By Andrea Heisinger

New York, Sept. 27 - Two new corporate deals hit the investment-grade market on Thursday as the tone was somewhat improved at the open, a source told Prospect News.

"Spreads are a little tighter," a trader said in late morning of the New York session. "It was a little weaker the last couple of days, but we had better tone this morning."

Watson Pharmaceuticals, Inc. announced an offering that could be $3.75 billion in size. The offering includes tranches due 2017, 2022 and 2042. Proceeds are going toward the acquisition of Actavis Group.

MetLife, Inc. is also in the market with a $1 billion remarketing of series C senior component debentures. The deal is being sold in two tranches of $500 million each due 2017 and 2022 after the remarketing settles.

There was also pricing in late morning of a $1 billion sovereign trade of five-year notes by Agence Francaise de Developpement.

The secondary side of the market was seeing "little flow in general," the trader said, adding that volume had improved "probably because people are back from vacation for Yom Kippur."

What corporate paper is being traded is seeing big demand, the trader said.

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