BNY sells floaters during quiet session to end week; Celgene notes firm; Time Warner rallies

By Cristal Cody and Aleesia Forni

Virginia Beach, Va., Aug. 2 - The investment-grade primary market finished the week on a quiet note Friday, though the session did see a new floating-rate issue from Bank of New York Mellon Corp.

The financial services company sold $100 million floaters due 2018 at Libor plus 50 bps.

Friday's session also saw Swedish Export Credit Corp. detail terms of a recent $133 million issue of floating-rate notes due 2014.

Away from the primary space, players were focused on U.S. economic data on Friday.

Treasuries soared after the government's July job report came in lower than expected, casting doubt on the Federal Reserve's quantitative easing program ending in September, market sources said.

The Labor Department reported an additional 162,000 jobs for the month, below the 185,000 expected. The unemployment rate fell to 7.4% from 7.6%.

Market sources widely expected the Federal Reserve to slow the $85 billion-a-month asset purchases following its September policy meeting.

Despite the mid-week lull due to the two-day Federal Open Market Committee meeting, total issuance for the week that split the end of July and start of August hit roughly $15 billion, according to data collected by Prospect News.

The week's issuance fell in line with sources' estimates, though the total was on the lighter side of what one syndicate source had predicted would be a $15 billion to $20 billion week.

As for the coming week, one banker said late Friday that he expects another solid amount of new issuance.

The source estimated next week's issuance total to fall between $15 billion and $20 billion.

A second source added that about $20 billion of new investment-grade issuance is expected in the week ahead, with the bulk in financial paper.

Meanwhile, secondary market activity thinned headed into the afternoon following the release of the July job report.

"After the numbers, things kind of quieted down," one trader said. "Volume's a little over $9 billion, which isn't bad for a summer Friday."

"Light volume today," another trader said.

The Markit CDX Series 20 North American Investment Grade index fell 1 basis point to a spread of 73 bps.

BNY Mellon sells floaters

Friday's primary market saw BNY Mellon price a $100 million issue of five-year senior medium-term notes at par to yield Libor plus 50 bps, according to a FWP filing with the Securities and Exchange Commission.

Deutsche Bank Securities Inc. was the bookrunner for the SEC-registered notes.

BNY Mellon is a New York-based financial services company.

Celgene firms

In secondary action, Celgene Corp.'s $1.5 billion of notes sold in three tranches (Baa2/BBB+/) on Thursday firmed slightly in Friday's secondary market, a trader said.

The 2.3% notes due 2018 tightened 5 bps to 80 bps bid. The company sold $400 million of the notes at a spread of Treasuries pus 85 bps.

The 4% notes due 2023, sold in a $700 million offering at a spread of Treasuries plus 135 bps, were better on the day at 131 bps bid.

The tranche of 5¼% bonds due 2043 tightened to 150 bps bid, 152 bps offered. Celgene sold $400 million of the bonds at a spread of Treasuries plus 155 bps.

Celgene is a Summit, N.J.-based biopharmaceutical company.

Time Warner Cable rallies

In other trading, Time Warner Cable Inc. "is rallying on the back of the Cox/Charter headlines," a trader said. "Bonds are 10 bps better today."

The bonds received support on reports that Cox Communications, Inc. is in discussions with Charter Communications Inc. for a potential merger after Time Warner Cable nixed a similar proposition from Charter.

Time Warner Cable's 4% notes due 2021 (Baa2/BBB/BBB) erased the previous day's losses and firmed 10 bps Friday afternoon to 205 bps bid, 195 bps offered and headed out in the 205 bps bid area, according to traders at separate desks.

The notes were offered at 220 bps bid, 210 bps offered on Tuesday and were seen at 198 bps bid early Friday, one trader said.

The New York -based entertainment company sold $1 billion of the notes on Sept. 7, 2011 at a spread of 210 bps over Treasuries.

Time Warner Cable's CDS closed at 202 bps on Thursday and declined to 188 bps late Friday.

CDS costs decline

Investment-grade bank and brokerage credit default swap costs declined on Friday, according to a market source.

Bank of America Corp.'s CDS costs fell 1 bp to 109 bps bid, 112 bps offered. Citigroup Inc.'s CDS costs decreased 2 bps to 101 bps bid, 106 bps offered. JPMorgan Chase & Co.'s CDS costs fell 2 bps to 76 bps bid, 80 bps offered. Wells Fargo & Co.'s CDS costs dropped 1 bp to 62 bps bid, 67 bps offered.

Brokerage costs ended flat to 3 bps lower. Merrill Lynch's CDS costs went out unchanged at 95 bps bid, 105 bps offered. Morgan Stanley's CDS costs fell 3 bps to 135 bps bid, 140 bps offered. Goldman Sachs Group, Inc.'s CDS costs decreased 2 bps to 126 bps bid, 131 bps offered.

Swedish Export gives terms

Swedish Export Credit detailed its recent pricing of $133 million of floating-rate notes due July 25, 2014. The notes priced at par to yield one-month Libor plus 3 bps, according to a FWP filing with the SEC.

The notes, which priced on Thursday, were sold under the company's SEC-registered U.S. medium-term note program.

Barclays acted as the lead manager.

Based in Stockholm, Swedish Export Credit is the lender to Sweden's export industry.

Paul Deckleman contributed to this review

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