AES, Goldman Sachs BDC, Charter, Allstate, CMS in primary; high-grade inflows increase

By Cristal Cody

Tupelo, Miss., Nov. 19 – Several investment-grade issuers were in the primary market on Thursday.

AES Corp. priced a $1.8 billion Rule 144A and Regulation S two-tranche offering of green senior notes (Ba1/BBB-/BBB-).

The company sold long five- and 10-year notes following fixed income income investor calls for the offering on Wednesday.

Goldman Sachs BDC, Inc. priced an upsized $500 million of long five-year registered senior notes (Baa3//BBB-) at a spread of 255 basis points over Treasuries, tighter than initial talk in the Treasuries plus 275 bps area.

The deal was upsized from $400 million.

Also, Charter Communications, Inc. subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. offered three tranches of senior secured notes (Ba1/BBB-/BBB-).

The deal includes two new tranches and an add-on to the 3.7% notes due April 1, 2051 that were first priced on April 14 in a $1.4 billion tranche.

In addition, Allstate Corp. offered two tranches of fixed-rate senior notes (A3/A-/A-) on Thursday to fund its acquisition of National General Holdings Corp.

In other supply, MPT Operating Partnership, LP and MPT Finance Corp. priced an upsized $1.3 billion of long 10-year senior notes (Ba1/BBB-/) that are guaranteed by parent company Medical Properties Trust, Inc.

In addition, CMS Energy Corp. sold $400 million of 30-year fixed-to-fixed-rate reset junior subordinated notes (Baa2/BBB-/BB+) on Thursday.

High-grade supply has been heavy week to date with more than $35 billion of corporate volume and over $48 billion of both corporate and sovereign, supranational and agency bonds sold.

Volume beat market expectations of about $25 billion to $30 billion of supply for the week.

High-grade inflows continue

High-grade inflows climbed over the past week ended Wednesday.

Inflows in investment-grade corporate funds rose to $4.14 billion from $3.47 billion of inflows in the previous week, according to Refinitive Lipper US Fund Flows.

In the week prior, high-grade corporate funds saw outflows of $1.58 billion.

Market tone was mostly positive over the day in the high-grade space.

The iShares iBoxx Investment Grade Corporate Bond ETF improved 0.56% to $137.69.

The PIMCO Investment Grade Corporate Bond Index closed up 0.59% at $116.77.

The Markit CDX North American Investment Grade 35 index closed modestly softer on the day at a spread of 53.22 bps.

Looking at the secondary market, Verizon Communications Inc.’s $12 billion of senior notes (Baa1/BBB+/A-) priced in five tranches last week are active and trading better than issuance, a source said.

The company’s 2.875% notes due Nov. 20, 2050 were quoted trading over 103.5 on Thursday.

Verizon sold $2.75 billion of the notes on Nov. 10 at 99.74 to yield 2.89%.

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