KfW prices $3 billion as lone reported issuer; deal volume thins; AT&T paper improves

By Cristal Cody

Tupelo, Miss., Jan. 24 – KfW priced $3 billion of long 10-year notes on Wednesday as the lone reported issuer in the high-grade primary market.

No corporate issuers were seen during the session, and the rare lack of supply was not attributed to any one reason, according to sources.

Total weekly volume likely will miss syndicate forecasts with less than $5 billion of corporate bonds priced week to date, one source said.

About $20 billion to $25 billion of issuance was expected for the week.

Including KfW’s deal, SSA volume for the week to date totals $8 billion.

Issuance in corporate bonds is expected to pick up in the upcoming weeks after companies exit earnings blackout periods, sources report.

In the secondary market on Wednesday, AT&T Inc.’s 3.9% notes due Aug. 14, 2027 (Baa1/BBB+/A-) headed out flat on the day at 129 bps bid but have tightened more than 20 basis points from the 152 bps area since mid-December, a source said.

The Dallas-based telecommunications company sold $5 billion of the notes on July 27, 2017 at a spread of 160 bps over Treasuries.

AT&T is scheduled to go to trial in March to gain approval for its $85.4 billion cash and stock acquisition of Time Warner Inc. The Justice Department filed suit in late 2017 to block the deal.

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