Supply thins; investors want yield, ‘but there is none’; Crown Castle, Progressive improve

By Cristal Cody

Eureka Springs, Ark., Aug. 26 – Investment-grade primary and secondary market activity on Friday stayed mostly quiet.

“It’s really been quiet in corporates,” one source said. “Everything’s so tight, it’s hard getting anything done. Everyone wants yield, but there is none.”

Primary action is expected to stay light through the remainder of the month with supply forecast at more than $100 billion in September, according to market sources.

“In September, the new issue market comes back to life; things will pick up again there,” the source said. “Not much happening this week or next week for corporates.”

Crown Castle International Corp.’s 2.25% senior notes due 2021 traded at 105 basis points offered in secondary trading on Friday afternoon, according to a trader.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on Aug. 22 at a spread of 112 bps over Treasuries.

Progressive Corp.’s new 2.45% senior notes due 2027 traded about 2 bps better than issuance at 90 bps offered, a trader said.

The company priced $500 million of the notes (A2/A/A/) on Aug. 22 at a spread of 92 bps over Treasuries.

Old Republic International Corp.’s 3.875% senior notes due 2026 priced on Tuesday softened but continued to trade on Friday about 15 bps tighter than issuance.

The notes traded going out on Friday at 220 bps offered, a trader said. They had been seen early Thursday at 208 bps offered.

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