Telstra brings day’s sole issue; Exxon Mobil, Southwestern Energy mostly flat

By Aleesia Forni and Cristal Cody

Virginia Beach, March 30 – Telstra Corp. Ltd. was the session’s sole issuer on Monday to open the shortened week for the investment-grade bond market.

The company priced $1 billion of 10-year notes around 20 basis points tight of initial price talk, and the deal garnered an order book that was around 3.5 times oversubscribed.

In forward calendar news, Banc of California Inc. announced plans to price a 10-year offering of senior notes.

Sources are expecting the slower pace of the high-grade primary to continue throughout the week ahead of the Easter holidays, with only $15 billion of new issuance expected to price.

This lull in activity comes on the heels of the more than $161 billion of new issuance the month of March has seen so far.

Investment-grade bonds headed out flat to modestly better in quiet trading on Monday, sources said.

Exxon Mobil Corp.’s 2.709% notes due 2025 traded mostly flat during the session.

Southwestern Energy Co.’s 4.95% senior notes due 2025 were unchanged from Friday.

The Markit CDX North American Investment Grade series 23 index firmed 1 bp to a spread of 64 bps.

Telstra prices tight

Telstra brought Monday’s sole new deal to market, pricing $1 billion of 3.125% senior notes (A2/A/) on Monday with a spread of 118 bps over Treasuries, according to an informed source.

Pricing was at 99.83 to yield 3.145%.

The notes sold at the tight end of guidance set in the 120 bps area, having firmed from initial talk at Treasuries plus 135 bps to 140 bps.

Proceeds will be used for general corporate purposes.

The bookrunners were Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

The telecommunications and media company is based in Melbourne, Australia.

Banc of California’s 10-years

Banc of California plans to sell $175 million of senior notes due 2025, according to a 424B5 filed with the Securities and Exchange Commission.

Proceeds will be used for general corporate purposes.

Sandler O’Neill + Partners, LP, BofA Merrill Lynch, Keefe, Bruyette & Woods, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners.

Deutsche Bank Securities Inc. is the co-manager.

The notes are being sold concurrently with an offering of series D noncumulative perpetual preferred stock.

The bank is based in Irvine, Calif.

Exxon Mobil steady

Exxon Mobil’s 2.709% notes due 2025 traded mostly flat at 68 bps bid going out on Monday, a source said.

The notes were quoted earlier in the day at 67 bps offered.

Exxon Mobil sold $1.75 billion of the notes (Aaa/AAA/) on March 3 at Treasuries plus 58 bps.

The oil and gas company is based in Irving, Texas.

Southwestern Energy flat

Southwestern Energy’s 4.95% notes due 2025 were unchanged at 282 bps bid, according to a market source.

Southwestern Energy sold $1 billion of the notes (Baa3/BBB-/) on Jan. 20 at Treasuries plus 318 bps.

The independent natural gas and oil company is based in Houston.

Bank/broker CDS costs lower

Investment-grade bank and brokerage CDS prices were mostly lower on Monday, according to a market source.

Bank of America Corp.’s CDS costs were down 2 bps to 64 bps bid, 67 bps offered. Citigroup Inc.’s CDS costs were 1 bp lower at 74 bps bid, 77 bps offered. JPMorgan Chase & Co.’s CDS costs fell 1 bp to 63 bps bid, 66 bps offered. Wells Fargo & Co.’s CDS costs were unchanged at 41 bps bid, 44 bps offered.

Merrill Lynch’s CDS costs were 2 bps lower at 67 bps bid, 72 bps offered. Morgan Stanley’s CDS costs fell 1 bp to 74 bps bid, 77 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 1 bp lower at 81 bps bid, 84 bps offered.

Stephanie N. Rotondo contributed to this review.

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