High-grade trading thins; BB&T sells $1.5 billion notes; Freeport LNG plans roadshow

By Cristal Cody

Tupelo, Miss., May 31 – High-grade primary action stayed thin on Thursday with a $1.5 billion two-tranche offering of notes priced during the session from BB&T Corp.

The deal follows BB&T’s $250 million sale of three-year senior medium-term floating-rate notes on Friday before the Memorial Day holiday.

The Markit CDX North American Investment Grade 30 index eased about 1 basis point to close at a spread of 66 bps.

Supply has been thin over the short week amid volatility in the financial markets on concerns with Italy’s government and the U.S. tariffs on steel and aluminum imports announced Thursday. In addition, the U.S. non-farm payroll report for May will be released on Friday.

In the previous session, $3.4 billion of high-grade bonds priced, while supply was quiet on Tuesday.

The new issues priced Wednesday “at a very wide concession of +17 bps along with a roughly -4 bps break performance, much weaker than last week's +4 bps and -6 bps numbers, respectively,” BofA Merrill Lynch analysts said in a note released Thursday. “Also today we saw the return of meaningful 1-3 year BWIC activity and dealers ended up net buying about $900 [million]of such paper.”

Syndicate sources had expected about $20 billion of volume over the week.

Coming up in the week ahead, Freeport LNG plans to hold a deal roadshow.

BB&T prices $1.5 billion

BB&T priced $1.5 billion of senior medium-term notes (A2/A-/A+) in two tranches on Thursday, according to FWP filings with the Securities and Exchange Commission.

The company priced $500 million of 3.2% long three-year notes at 99.881 and a spread of Treasuries plus 70 bps.

BB&T sold $1 billion of 3.7% seven-year notes at 99.798 and a Treasuries plus 95 bps spread.

BB&T Capital Markets, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the bookrunners.

BB&T on Friday priced $250 million three-year series G senior medium-term floating-rate notes at Libor plus 32 bps.

The bank and financial services company is based in Winston-Salem, N.C.

Freeport LNG in deal pipeline

Freeport LNG (expected BBB-/expected BBB-) plans to hold a roadshow for a Rule 144A offering of notes in the week ahead, according to a market source.

The fixed income investor meetings will be held Monday through June 8.

Credit Suisse Securities, Goldman Sachs, MUFG and SMBC Nikko Securities America, Inc. are the arrangers.

Freeport LNG is a natural gas liquification and export company based in Houston.

Funds add again

Investment-grade corporate funds once more benefited from an inflow, seeing $0.849 billion arrive in the week to May 30, according to fund-flow statistics generated by AMG Data Services Inc.

That follows inflows of $2.529 billion, $3.069 billion, $0.804 billion and $0.997 billion in the preceding weeks, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp.’s Lipper analytics division.

The IG funds continue to have seen 10 inflows in the last 10 weeks.

Apart from the Feb. 14 and Feb. 21 weeks, every week so far this year has seen positive flows and in fact before those two weeks in February investment-grade corporates saw a 21-week run of inflows dating back to mid-September, according to a Prospect News analysis of the data.

The latest cash gain raises the year-to-date inflow for the IG corporates to $46.28 billion from $45.43 billion the week prior, another new peak for the year so far.

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