Goldman Sachs caps $34 billion week; Ford Motor Credit tightens; Morgan Stanley mostly flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Va., Oct. 16 – Goldman Sachs Group Inc. priced a $5 billion billion offering of new and reopened notes on Friday, capping off a stellar shortened week for investment-grade bonds.

More than $34 billion of new issuance entered the primary during the four sessions following the extended Columbus Day holiday weekend, with around $24 billion of that total coming from financial and banking names.

The figure also blew away earlier predictions of $20 billion of supply.

Goldman Sachs offered the four-part bond even though it announced lower than expected earnings on Thursday.

The deal amassed an order book that was more than three times oversubscribed, a market source said.

Investment-grade bonds were mixed in secondary trading on Friday.

Ford Motor Credit Co. LLC’s 4.134% senior notes due 2025 tightened over the session, going out about 9 bps better.

Morgan Stanley’s 4% senior notes due 2025 eased 1 bp but remain mostly unchanged in the secondary market.

Earlier in the day, Dollar General Corp.’s 4.15% senior notes due 2025 brought to market on Thursday traded 6 bps tighter.

The Markit CDX North American Investment Grade 25 index tightened 2 bps to close on Friday at a spread of 81 bps.

Lipper sees inflows

Meantime, Lipper US Fund Flows reported net inflows of $1.1 billion for corporate investment-grade funds for the week ended Oct. 14.

This number follows four-straight weeks of outflows and is only the second reported week of inflows the asset class has posted in the past 13 weeks.

Year-to-date, corporate high-grade funds have seen $13.6 billion of inflows.

Goldman four-parter

Goldman Sachs Group priced a $5 billion four-part offering of notes on Friday in new and reopened tranches, according to market sources.

A $750 million tap of the bank’s existing 2.75% senior notes due Sept. 15, 2020 sold at 100.341 to yield 2.674%, or Treasuries plus 132 basis points.

The notes (A3/A-/A) sold at the tight end of guidance set in the Treasuries plus 135 bps area, which tightened from talk in the Treasuries plus 145 bps area.

The original $1.25 billion issue sold on Sept. 8 at Treasuries plus 127 bps.

Also, a $500 million tap of Goldman Sachs Group’s floating-rate notes (A3/A-/A) due Sept. 15, 2020 sold at 99.347 to yield Libor plus 134 bps.

The notes were talked at the Libor equivalent of the five-year fixed-rate add-on.

The existing $500 million floating-rate tranche also sold on Sept. 8 at Libor plus 120 bps.

In the new paper tranches, there was $2 billion of 4.25% subordinated notes (Baa2/BBB+/A-) due Oct. 21, 2025 priced at 99.3 to yield 4.337%.

The issue sold with a spread of Treasuries plus 230 bps, at the tight end of the Treasuries plus 235 bps area guidance. Initially, the notes were talked in the Treasuries plus 245 bps area

Finally, $1.75 billion of new 4.75% senior notes (A3/A-/A) due Oct. 21, 2045 sold at 99.084 to yield 4.808% with a spread of Treasuries plus 192 bps.

The notes came at the tight end of the Treasuries plus 195 bps area guidance, which tightened from the Treasuries plus 205 bps area.

Goldman Sachs & Co. was the bookrunner.

The financial services company is based in New York City.

Ford Motor Credit stronger

Ford Motor Credit’s 4.134% notes due 2025 tightened about 9 bps to 193 bps bid on Friday, a market source said.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on July 30 at a spread of Treasuries plus 187.5 bps.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Morgan Stanley eases

Morgan Stanley’s 4% notes due 2025 eased 1 bp to 163 bps bid, according to a market source.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

Dollar General improves

Dollar General’s 4.15% senior notes due 2025 traded better early Friday at 109 bps offered, a market source said.

Dollar General sold $500 million of the notes (Baa3/BBB) on Thursday at a spread of Treasuries plus 215 bps.

The discount retailer is based in Goodlettsville, Tenn.

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