Rentenbank prices as market tone remains positive; Verizon, AT&T, Time Warner Cable bonds ease

By Cristal Cody and Aleesia Forni

Virginia Beach, March 14 - The lone deal in the primary market on Friday came from Germany's Landwirtschaftliche Rentenbank, capping off a week that saw more than $30 billion of investment-grade paper price.

Rentenbank sold a $500 million issue of 2.375% seven-year notes in line with talk at mid-swaps plus 15 basis points.

The market is seeing "some signs of fatigue," one market source said on Friday, though the overall tone "remains positive."

Lipper reported inflows of $3.16 billion into corporate investment-grade funds for the week ended Wednesday, bringing the year-to-date total to more than $24 billion.

Due in part to the two-day Federal Open Market Committee meeting mid-week, sources are predicting a slight slowdown in primary activity in the week ahead. Around $20 billion to $25 billion of supply is expected.

Investment-grade bonds were mixed in secondary trading over the day on Friday, sources said.

The Markit CDX North American Investment Grade series 21 index headed out flat at a spread of 68 bps.

Bonds in the telecommunications, media and technology sector weakened with new issues from Verizon Communications Inc. and AT&T Inc. mostly wider, according to market sources.

Time Warner Cable Inc.'s 4.125% notes due 2021 traded about 4 bps wider on the week, a source said.

Rentenbank issues $500 million

Germany's Rentenbank priced $500 million of 2.375% seven-year notes at mid-swaps plus 15 bps on Friday, according to a market source.

The notes (Aaa/AAA/AAA) sold in line with talk.

BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. managed the Regulation S sale.

The German development agency for agribusiness is based in Frankfurt.

Verizon mixed

Verizon's senior notes (Baa1/BBB+/A-) were mostly weaker in the secondary market, according to a trader.

The tranche of 2.55% notes due 2019 traded better than issuance at 88 bps bid, 83 bps offered. Verizon sold $500 million of the notes at 95 bps over Treasuries on Monday in a $4.5 billion five-part notes offering.

The tranche of 4.15% notes due 2024 eased to 142 bps bid, 140 bps offered on Friday, the trader said. The company sold $1.25 billion of the notes at 140 bps plus Treasuries in the deal on Monday.

Verizon's 5.05% notes due 2034 widened to 144 bps bid, 140 bps offered, according to the trader. The company sold $1.25 billion of the 20-year notes at a spread of Treasuries plus 135 bps.

The telecommunications company is based in New York City.

AT&T widens

AT&T's 3.9% notes due 2024 widened to 131 bps offered from 121 bps offered earlier on Friday, according to market sources.

The company priced $1 billion of the 10-year notes (A3/A- /A) on March 5 at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

Time Warner Cable eases

Time Warner Cable's 4.125% notes due 2021 (Baa2/BBB/BBB) eased to 75 bps bid on Friday, according to an informed source.

The notes traded a week ago at 71 bps bid.

Time Warner Cable sold $700 million of the notes at Treasuries plus 155 bps in 2010.

The paper tightened more than 100 bps in February in reaction to the company's plan to be acquired by Comcast Corp. for $45.2 billion in stock.

New York City-based Time Warner Cable is a broadband communications company.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage credit default swap prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 72 bps bid, 76 bps offered. Citigroup Inc.'s CDS costs rose 1 bp to 84 bps bid, 88 bps offered. JPMorgan Chase & Co.'s CDS costs were flat at 63 bps bid, 66 bps offered. Wells Fargo & Co.'s CDS costs ended unchanged at 41 bps bid, 44 bps offered.

Merrill Lynch's CDS costs eased 1 bp to 74 bps bid, 78 bps offered. Morgan Stanley's CDS costs rose 1 bp to 95 bps bid, 99 bps offered. Goldman Sachs Group, Inc.'s CDS costs were flat at 99 bps bid, 103 bps offered.

Paul Deckelman contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.