Busy post-holiday high-grade supply eyed; JPMorgan, Goldman improve; AT&T notes mixed

By Cristal Cody

Tupelo, Miss., Feb. 15 – High-grade primary market activity remained quiet on Friday as participants eyed a busy four-day week ahead.

Deal volume was heavy this week with more than $38 billion of investment-grade bonds priced in the first three sessions. Syndicate sources had expected about $25 billion to $30 billion of issuance.

In the upcoming week, supply is projected to range in the $20 billion to $25 billion area, according to market sources.

The bond markets will be closed on Monday for Presidents Day.

Looking ahead to activity expected on Tuesday, Weyerhaeuser Co. (Baa2/BBB/) will hold fixed-income investor calls, a source said. BofA Merrill Lynch, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the arrangers.

The Markit CDX North American Investment Grade 31 index closed on Friday more than 1 basis point tighter at a spread of 63 bps.

In the secondary market, bank and financial paper priced this week traded mostly flat to about 4 bps tighter than issuance.

JPMorgan Chase Bank, NA’s $1.5 billion of senior floating-rate notes due Feb. 19, 2021 sold on Tuesday tightened about 3 bps.

Goldman Sachs Group Inc.’s $1.5 billion of 3.625% senior notes due Feb. 20, 2024 priced on Wednesday traded about ½ bp better on Friday.

In other new issue trading, AT&T Inc.’s $5 billion of global senior notes (Baa2/BBB/A-) brought to the market in two tranches on Wednesday were mixed. The company’s 10-year tranche softened about 4 bps to 5 bps, while the 20-year tranche firmed about 2 bps.

Altria Group Inc.’s $11.5 billion seven-part offering of senior notes (A3/BBB/) that priced on Tuesday remained tight in the secondary market. The notes traded on Friday about 5 bps to 20 bps better than issuance, a source said.

Meanwhile, inflows to the high-grade space, which includes corporates, agencies, mortgages and Treasuries, was moderate for the week ended Feb. 13, according to a BofA Merrill Lynch note released on Friday.

“Buying of U.S. high grade funds and ETFs decelerated to $2.64 [billion] for this past week ending on February 13, down from the [No.] 4 biggest inflow on record of $6.51 [billion] a week earlier,” Yuri Seliger, a credit strategist with BofA Merrill Lynch, said in the report.

Inflows to short-term high grade declined to $1.17 billion from $1.68 billion, while inflows to high-grade excluding short-term slid to $1.48 billion from $4.83 billion.

Flows declined to $950 million from $3.97 billion for high-grade funds and to $1.69 billion from $2.45 billion for ETFs, according to the note.

As previously reported, for the week ended Feb. 13, Lipper US Fund Flows reported inflows of $1.89 billion for corporate investment-grade funds, compared to inflows of $2.67 billion in the previous week and $34 million in the prior week.

JPMorgan floaters firm

JPMorgan Chase Bank’s floating-rate notes due Feb. 19, 2021 (Aa2/A+/AA) improved to 34 bps bid, 30 bps offered in the secondary market, a source said.

The bank sold $1.5 billion of the notes on Tuesday at Libor plus 37 bps.

The banking services company and subsidiary of JPMorgan Chase & Co. is based in Columbus, Ohio.

Goldman edges tighter

Goldman Sachs’ 3.625% senior notes due Feb. 20, 2024 were quoted on Friday at 112 bps bid, 110 bps offered, a market source said.

Goldman Sachs (A3/BBB+/A) sold $1.5 billion of the notes on Wednesday at a spread of Treasuries plus 112.5 bps.

The financial services company is based in New York City.

AT&T tranches mixed

AT&T’s 4.5% notes due March 1, 2029 softened about 4 bps to 5 bps on Friday after trading flat on Thursday, according to market sources.

The notes were quoted late Friday at 175 bps bid and were earlier seen at 174 bps bid, 170 bps offered.

AT&T sold $3 billion of the 10-year notes on Wednesday at a spread of Treasuries plus 170 bps.

AT&T’s 4.85% notes due March 1, 2039 firmed on Friday to 218 bps bid, 214 bps offered after trading unchanged in the prior session.

The notes priced on Wednesday in a $2 billion tranche at a Treasuries plus 220 bps spread.

AT&T is a Dallas-based telecommunications company.

© 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.