Sterling Bancorp offers fixed/floaters; Steel Dynamics firms; AbbVie, Bristol-Myers tight

By Cristal Cody

Tupelo, Miss., Dec. 11 – One investment-grade company marketed registered bonds on Wednesday in an otherwise quiet deal session.

Sterling Bancorp launched a $200 million offering of 10-year fixed-to-floating-rate subordinated notes (expected ratings Kroll: BBB) at the start of the session. The notes are non-callable for five years.

Otherwise, the lone reported high-grade issuer was Public Storage with a $200 million offering of preferred securities.

Investment-grade bond supply so far this week totals more than $4.5 billion, near the $5 billion to $10 billion range syndicate sources forecasted.

Market activity was expected to be fairly quiet in front of the Federal Reserve’s monetary policy rate decision due Wednesday afternoon, sources said.

The Federal Reserve left rates unchanged after three previous rate cuts earlier this year.

The final cut announced in October lowered the target range for the federal funds rate to 1½% to 1¾%.

“Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate,” the FOMC statement said. “The committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the committee's symmetric 2% objective.”

The Markit CDX North American Investment Grade 33 index tightened less than 1 basis point on Wednesday to end at a spread of 49.2 bps.

Meanwhile, new issues priced this week have traded mostly better in the secondary market, a source said.

Steel Dynamics, Inc.’s $1 billion two-part offering of fixed-rate senior notes (Baa3/BBB-/BBB) that priced tighter than guidance on Monday improved more than 5 bps.

The company’s 3.45% notes due April 15, 2030 were seen 8 bps tighter in the 157 bps area.

Steel Dynamics sold $600 million of the notes on Monday at 99.736 to yield 3.481% and a Treasuries plus 165 bps spread. Price guidance was in the 175 bps spread area, plus or minus 5 bps.

Elsewhere in the secondary market, oil and gas bonds traded mostly tighter on Wednesday, a source said.

Dominion Energy Gas Holdings, LLC’s 3% senior notes due Nov. 15, 2029 tightened 3 bps after softening 1 bp in the previous session.

Biopharmaceutical bonds priced in two of the year’s biggest deals were mostly unchanged on the day but traded tighter than issuance.

In other secondary trading, Intel Corp.’s 2.45% senior notes due Nov. 15, 2029 widened 5 bps.

Dominion Energy improves

Dominion Energy Gas Holdings’ 3% senior notes due Nov. 15, 2029 (Baa1/BBB+/BBB+) tightened about 3 bps in secondary trading to 121 bps bid on Wednesday, according to a market source.

The company sold $600 million of the 10-year notes on Nov. 18 at a Treasuries plus 123 bps spread.

Dominion Energy Gas Holdings is a Richmond, Va.-based natural gas company and subsidiary of Dominion Energy Inc.

Intel softens

Intel’s 2.45% senior notes due Nov. 15, 2029 (A1/A+/A+) eased 5 bps on Wednesday to 66 bps bid, according to a market source.

The company sold $1.25 billion of the 10-year notes on Nov. 18 at a spread of 65 bps over Treasuries.

Intel is a semiconductor chip maker based in Santa Clara, Calif.

AbbVie trades tighter

AbbVie Inc.’s 3.2% notes due Nov. 21, 2029 (Baa2/A-/) traded mostly flat at 114 bps bid during the session, according to a market source.

The company sold $5.5 billion of the bonds at a Treasuries plus 130 bps spread on Nov. 12 as part of a $30 billion 10-part deal.

AbbVie is a biopharmaceutical company based in North Chicago, Ill.

Bristol-Myers stable

Bristol-Myers Squibb Co.’s 3.4% senior notes due July 26, 2029 were mostly unchanged at 75 bps bid in secondary trading on Wednesday, a market source said.

Bristol-Myers sold $4 billion of the 10-year notes (A2/A+/) on May 7 at a Treasuries plus 105 bps spread as part of a $19 billion nine-tranche offering.

The biopharmaceutical company is based in New York.

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