Light deal supply forecast for short holiday week; CSX notes ease; Ingersoll-Rand firm

By Cristal Cody

Tupelo, Miss., Feb. 16 – The investment-grade bond market stayed mostly quiet on Friday ahead of the long holiday weekend.

Bond markets will be closed on Monday for the Presidents’ Day holiday.

Financial market activity also was expected to be light with Chinese markets closed for the Chinese New Year holiday.

Supply is predicted to remain fairly light in the week ahead following steady but thin issuance this week. Nearly $14 billion of corporate and SSA bonds priced week to date, compared to about $15 billion to $20 billion expected.

About $15 billion to $20 billion of bond supply is forecast for the shortened week, according to market sources.

A handful of companies are in the deal pipeline, while the Bank of New Zealand (A1/AA-/AA-) was expected to conclude a week-long deal roadshow on Friday, according to market sources.

In the secondary market, new issues priced over the week were mixed.

CSX Corp.’s $2 billion of fixed-rate notes (Baa1/BBB+/) priced in three tranches on Thursday softened 2 basis points to 3 bps.

Ingersoll-Rand Global Holding Co. Ltd.’s $1.15 billion of guaranteed senior notes (Baa2/BBB/) priced in three tranches on Tuesday traded flat to about 5 bps tighter.

In other secondary trading, AT&T Inc.’s notes (Baa1/BBB+/A-) were mixed going out on Friday.

The company is scheduled to go to court in March against the Justice Department, which filed suit to block AT&T’s $85.4 billion cash and stock acquisition of Time Warner Inc.

Time Warner’s paper (Baa2/BBB/BBB+) traded mostly softer on Friday.

CSX widens

The new 3.8% notes due March 1, 2028 that CSX priced on Thursday eased to 92 bps bid, 90 bps offered in secondary trading, according to a market source.

CSX sold $800 million of the 10-year notes at a spread of Treasuries plus 90 bps.

The company’s 4.3% notes due March 1, 2048 softened to 117 bps bid, 115 bps offered. The bonds priced in an $850 million tranche on Thursday at a spread of 115 bps over Treasuries.

CSX is a transportation company based in Jacksonville, Fla.

Ingersoll-Rand mixed

Ingersoll-Rand Global Holding’s 2.9% notes due Feb. 21, 2021 tightened to 60 bps bid, 57 bps offered, according to a market source.

The company sold $300 million of the three-year notes on Tuesday at a spread of Treasuries plus 65 bps.

Ingersoll-Rand’s 3.75% notes due Aug. 21, 2028 were quoted on Friday at 95 bps bid, 92 bps offered in the secondary market.

The $550 million tranche of long 10-year notes priced at a Treasuries plus 95 bps spread.

The notes are guaranteed by Ingersoll-Rand plc, Ingersoll-Rand Luxembourg Finance SA, Ingersoll-Rand Lux International Holding Co Sarl, Ingersoll-Rand Irish Holdings Unlimited Co. and Ingersoll-Rand Co.

The diversified industrial company is based in Swords, Ireland.

AT&T softens

AT&T’s 3.9% notes due Aug. 14, 2027 (Baa1/BBB+/A-) eased 2 bps to 104 bps bid in the secondary market on Friday, 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.

Time Warner eases

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) traded about 1 bp wider at 128 bps bid, according to a market source.

The company sold $800 million of the notes on May 5, 2016 at a spread of Treasuries plus 135 bps.

The media and entertainment company is based in New York.

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