Investment-grade volume thins; T-Mobile, Vereit, Ford in primary; high-grade inflows decline

By Cristal Cody

Tupelo, Miss., June 18 – High-grade supply slowed on Thursday after heavy issuance brought to the primary market in the previous two sessions.

T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc. offered a Rule 144A and Regulation S three-part deal of dollar-denominated senior secured notes (Baa3/BBB-/BBB-) on Thursday.

T-Mobile’s Rule 144A and Regulation S senior secured offering includes long five-year notes talked to price in the Treasuries plus 140 basis points area, long seven-year notes talked at the 180 bps spread area and long 10-year notes talked to price in the 215 bps over Treasuries area.

The deal follows T-Mobile’s $19 billion five-part offering of senior secured notes (Baa3/BBB-/BBB-) priced April 2 to complete its merger with Sprint Corp.

Vereit Operating Partnership LP priced $600 million of guaranteed senior notes due Jan. 15, 2028 (Baa3/BBB-/BBB) in a deal upsized from $500 million and priced 50 bps tighter than talk.

Also, Ford Foundation offered a $1 billion two-tranche offering of long-dated taxable social bonds (Aaa/AAA/) on Thursday.

In other supply on Thursday, PG&E Corp. sold $2 billion of notes in two tranches in the high yield portion of its debt offerings as part of its reorganization funding from Chapter 11 bankruptcy.

Subsidiary Pacific Gas and Electric Co. priced an upsized $8,925,000,000 offering of first mortgage bonds (Baa3/BBB-/BBB-) in six tranches on Tuesday in the investment-grade portion.

New issuance this week has beaten volume forecasts.

Nearly $25 billion of high-grade issues priced on Wednesday, following more than $28 billion of supply on Tuesday and about $1.25 billion of issuance on Monday.

About $20 billion to as much as $40 billion of deal volume was expected by market participants for the week.

Meanwhile, investment-grade corporate fund inflows declined over the past week ended Wednesday to $4.26 billion, according to Refinitive Lipper US Fund Flows.

Inflows totaled $9.48 billion in the previous week and $9.91 billion in the week prior.

High-grade credit spreads continued to soften a second day on Thursday after tightening about 10 bps in the first two sessions of the week.

The Markit CDX North American Investment Grade 33 index eased about 4 bps to a spread of 74.4 bps.

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