BB&T sells floaters; after-holiday supply forecast; Yara notes ease; Vodafone still tight

By Cristal Cody

Tupelo, Miss., May 25 – BB&T Corp. brought a $250 million offering of three-year floating-rate notes to the primary market on Friday in an otherwise thinly staffed session.

The financial markets closed at 2 p.m. ET on Friday and will remain closed on Monday for the Memorial Day holiday.

The deal pushes week to date investment-grade volume up to more than $22 billion.

Market sources had expected about $25 billion of supply for the holiday-shortened week.

Supply following the holiday is predicted at about $20 billion, according to syndicate sources.

One issuer plans to hold fixed-income investor meetings for a deal in the week ahead. Hyundai Capital America (Baa1/A-/) is scheduled to hold a roadshow in the United States, Europe and Asia markets for a Rule 144A and Regulation S dollar-denominated note offering.

Elsewhere in the secondary market, new issues priced this week were mixed, sources report.

Yara International ASA’s $1 billion of 4.75% senior notes due June 1, 2028 that priced in the previous session eased to 181.5 basis points bid, 178 bps offered, a source said.

The notes priced at a spread of 180 bps over Treasuries, tighter than initial talk in the Treasuries plus 195 bps area and on the tight side of later guidance in the Treasuries plus 185 bps area.

The Oslo-based chemical company (Baa2/BBB/) held fixed-income investor calls for the deal on Monday and Tuesday.

Vodafone Group plc’s $11.5 billion six-tranche offering of senior notes priced Wednesday remained better than issuance in secondary trading on Friday, according to market sources.

The company’s $3 billion of 4.375% notes due May 30, 2028 were quoted at 149 bps bid, 146 bps offered before the session closed.

Vodafone (Baa1/BBB+/BBB+) priced $3 billion of the 10-year notes with a Treasuries plus 155 bps spread.

The $3 billion tranche of 5.25% notes due May 30, 2048 traded at 210 bps bid, 206 bps offered on Friday.

The London-based telecommunications company priced $3 billion of the long bonds at a 215 bps over Treasuries spread.

Both tranches were about 1 bp softer from Thursday’s levels, a source said.

In other secondary action on Friday, Barclays PLC’s 4.972% fixed-to-floating-rate notes due May 16, 2029 widened about 6 bps to 207 bps bid, according to a market source.

The notes traded about 1 bp tighter in the previous session.

Barclays (A2/A/A) sold $1.75 billion of the 11-year notes on May 9 at par to yield a Treasuries plus 197 bps spread.

Reports emerged mid-week that the company is considering a potential merger with Standard Chartered plc.

BB&T prices $250 million

BB&T priced $250 million of three-year series G senior medium-term floating-rate notes (A2/A-/A+) in the offering on Friday at par to yield Libor plus 32 bps, according to an FWP filing with the Securities and Exchange Commission.

Morgan Stanley & Co. LLC was the bookrunner.

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

Inflows decline

In other activity, for the week ended May 23, Lipper US Fund Flows reported inflows of $2.53 billion for corporate investment-grade funds, compared to reported inflows of $3.07 billion in the previous week and $804 million in the prior week.

Inflows to short-term high grade remain “elevated compared to those in March and the first half of April,” Yuri Seliger, analyst with BofA Merrill Lynch, said in a note released Friday.

High grade inflows totaled $1.68 billion for the week ended Wednesday, down from $2.49 billion a week earlier, according to the note.

Inflows to short-term high grade accounted for 69% of the total, or $1.16 billion, down from $1.41 billion in the prior week. Inflows to high grade outside of short-term dropped to $520 million from $1.08 billion.

Inflows declined also for high-grade funds to $500 million from $1.06 billion, Seliger said.

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