General Mills brings solid high-grade new issue; credit spreads ease; secondary slows

By Aleesia Forni and Cristal Cody

Virginia beach, Oct. 14 – A single deal from General Mills Inc. priced during a weak session for high-grade bonds with another round of market volatility keeping other issuers on the sidelines.

“It was a pretty quiet day today,” a market source said on Tuesday following the long Columbus Day holiday weekend.

General Mills sold its new $1 billion of senior notes in two parts during the session.

Both tranches of the offering sold at the tight end of price talk, which had firmed around 5 basis points compared to initial guidance.

A source added that the deal’s order book was nearly three times oversubscribed.

In other market action, Kommunalbanken AS announced plans to bring to market an offering of five-year notes.

Activity for the shortened week is expected to remain subdued, with around $15 billion of new issuance expected to price.

Investment-grade credit spreads widened over the day and secondary trading activity remained light, market sources said.

The Markit CDX North American Investment Grade series 23 index eased 1 bp to a spread of 73 bps.

“Spreads seem to have followed stocks, ultimately wider,” a trader said.

No secondary market activity was seen as the session closed in General Mills’ two tranches of notes, a trader said.

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