High-grade primary takes a pause; EDC sets price talk; Boeing, Time Warner notes tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 21 – Export Development Canada announced plans to bring a new offering of bonds to market as the primary market took a pause on Wednesday amid what has been a weaker earnings season so far.

The government-backed agency set price talk for a proposed $1 billion offering expected to come to market later this week.

Elsewhere, market activity was light during the session, with no new deals entering the primary.

One market source noted that he wouldn’t read too much into the quiet session, while another source added that the day’s empty calendar was just “an anomaly” and not so much a sign of broader weakness in the investment-grade space.

With the empty trading day, the week’s total supply remains at $12 billion, so far falling short of what players has expected to be a $20 billion week.

Investment-grade bonds were mixed in secondary trading over the day, while credit spreads leaked wider.

Boeing Co.’s senior notes (A2/A/A) tightened 1 bp to 7 bps after the company reported strong third-quarter earnings and raised its revenue and profit guidance for the year on Wednesday.

Time Warner Inc.’s notes (Baa2/BBB) firmed 1 bp to 6 bps in secondary trading over the day.

Morgan Stanley’s 4% senior notes due 2025 headed out 1 bp softer in secondary trading.

The Markit CDX North American Investment Grade 25 index closed 1 bp weaker at a spread of 82 bps.

EDC sets price talk

Ottawa-based Export Development Canada announced price talk for a planned $1 billion offering of three-year global notes (Aaa/AAA) on Wednesday, a market source said.

The notes are talked in the mid-swaps plus 12 basis points area.

BNP Paribas Securities Corp., Daiwa, Deutsche Bank Securities Inc. and Scotia Capital are the joint bookrunners.

Freddie passes

And Freddie Mac said on Wednesday that it would forgo issuing Reference Notes on its Oct. 21 announcement date, according to a company news release.

The government-sponsored enterprise is based in McLean, Va.

Boeing paper strengthens

Boeing’s 2.5% notes due 2025 traded 1 bp tighter over the session at 83 bps bid, a market source said.

The company sold $250 million of the notes on Feb. 18, 2015 at a spread of Treasuries plus 65 bps.

Boeing’s 3.5% notes due 2045 firmed 7 bps during the session to 110 bps bid.

The bonds priced in a $250 tranche at 100 bps over Treasuries in the February sale.

The aerospace company is based in Chicago.

Time Warner notes firm

Time Warner’s 3.6% notes due 2025 firmed 1 bp to 164 bps bid on Wednesday, a market source said.

The company sold $1.5 billion of the notes on May 28 at a spread of Treasuries plus 150 bps.

Time Warner’s 4.85% debentures due 2045 tightened 6 bps to 197 bps bid in secondary trading.

The company sold $600 million of the debentures in the May 28 sale at Treasuries plus 195 bps.

Time Warner is a media company based in New York.

Morgan Stanley softens

Morgan Stanley’s 4% notes due 2025 eased 1 bp to 159 bps bid on Wednesday, according to a market source.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

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