High-grade supply quiets on Fed focus; SBL deal ahead; RBS paper firms; Comcast mixed

By Cristal Cody

Tupelo, Miss., Oct. 30 – The investment-grade primary market stayed quiet on Wednesday after issuers had rushed to tap the primary market ahead of the Federal Reserve’s monetary policy decision.

More than $30 billion of investment-grade bonds and securities have priced week to date, outpacing syndicate forecasts of about $15 billion to $20 billion of supply for the entire week.

The Federal Reserve announced on Wednesday a rate cut of 25 basis points to lower the target range for the federal funds rate to 1½% to 1¾%.

The Markit CDX North American Investment Grade 33 index eased less than 1 bp to close the day at a spread of 54.5 bps.

More than $17 billion of bonds were priced on Tuesday.

Looking ahead, a Rule 144A and Regulation S bond offering from SBL Holdings LLC is expected after the company completed a round of fixed income investor calls on Tuesday.

In the secondary market, new issues were mixed and traded mostly wrapped around issuance to slightly tighter, sources report.

Royal Bank of Scotland Group plc’s $750 million of split-rated fixed-to-fixed-rate reset subordinated notes due Nov. 1, 2029 (Baa3/BB+/A-) priced in the previous session was among the exceptions and firmed about 10 bps, a source said.

The notes were quoted in the 199 bps offered area.

Royal Bank of Scotland Group priced the notes on Tuesday at par to yield a spread of 210 bps over Treasuries, compared to initial talk in the 230 bps spread area.

The notes will reset Nov. 1, 2024 to but excluding maturity to a rate equal to Treasuries plus 210 bps.

Comcast Corp.’s $4.75 billion of notes (A3/A-/A-) priced in three tranches on Tuesday were about 1 bp softer to 1 bp tighter in secondary trading.

The company sold $1.6 billion of 2.65% notes due Feb. 1, 2030 at 83 bps over Treasuries, $1.35 billion of 3.25% 20-year bonds at 93 bps over Treasuries and $1.8 billion of 3.45% notes due Feb. 1, 2050 with a 113 bps spread over Treasuries.

The notes are guaranteed by Comcast Cable Communications, LLC and NBCUniversal Media, LLC.

Bank and financial paper traded flat to about 5 bps softer during the session, a source said.

SBL in pipeline

SBL Holdings (/BBB-/BBB-) plans to price new 10-year senior notes in a Rule 144A and Regulation S offering, according to a market source.

The company held fixed income investor calls on Monday and Tuesday.

Citigroup Global Markets Inc. and RBC Capital Markets LLC are the arrangers.

SBL Holdings is a holding company for Topeka, Kansas-based insurer Security Benefit Life Insurance Co.

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