FHLBank, KfW, Quebec sell bonds; corporates quiet; high-grade inflows continue; AT&T flat

By Cristal Cody

Tupelo, Miss., Feb. 14 – Investment-grade corporate issuers were quiet on Thursday following more than $38 billion of volume in the first three sessions.

FHLBank System priced $1.25 billion of five-year Global Notes at the start of the session.

Two issuers priced Canadian dollar-denominated deals that were registered with the Securities and Exchange Commission on Thursday.

KfW sold C$1 billion of three-year global notes.

Quebec priced C$800 million of five-year global notes.

Otherwise, investment-grade market activity was mostly quiet after corporate issuers priced nearly $12 billion of bonds on Wednesday.

Supply this week has included a $5 billion two-part offering from AT&T Inc. on Wednesday and Altria Group Inc.’s $11.5 billion seven-part transaction on Tuesday.

Despite the holiday-shortened week ahead, a busy deal pace is expected, one source said.

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

For the week ended Feb. 13, Lipper US Fund Flows reported inflows of $1.89 billion for corporate investment-grade funds. This followed inflows of $2.67 billion in the previous week and $34 million in the week before that.

Looking at the secondary market, investment-grade bonds were mixed, sources said.

AT&T’s $5 billion of global senior notes (Baa2/BBB/A-) priced in two tranches on Wednesday traded mostly wrapped around issuance on Thursday after initially softening about 2 basis points in the gray market.

Altria’s senior notes (A3/BBB/) were seen earlier about 5 bps to 20 bps better than issuance, while Boeing Co.’s $1.5 billion of senior notes (A2/A/) priced in four tranches on Wednesday tightened about 1 bp to 4 bps in secondary trading.

Tyson Foods, Inc.’s 5.1% senior notes due Sept. 28, 2048 (Baa2/BBB/BBB) were seen about 3 bps better in the secondary market after the issue was reopened on Wednesday.

The company priced a $1 billion add-on to the notes at a spread of 230 bps over Treasuries.

Tyson originally sold $500 million of the notes on Sept. 25, 2018 at a Treasuries plus 190 bps spread. The total outstanding is now $1.5 billion.

The Markit CDX North American Investment Grade 31 index closed the day mostly unchanged at a spread of 64 bps.

Quebec sells bonds

Quebec (Aa2/AA-/AA-) sold C$800 million of 2.25% five-year global notes on Thursday at a spread of 46 bps over the Government of Canada benchmark, according to an FWP filing with the SEC.

The notes priced at 99.986 to yield 2.253%.

Bookrunners were BMO Nesbitt Burns Inc., CIBC World Markets Inc., HSBC Securities (Canada) Inc. and RBC Dominion Securities Inc.

KfW in primary

KfW (Aaa/AAA/Scope: AAA) sold C$1 billion of 2% global notes due Feb. 7, 2022 on Thursday at 99.775, according to an FWP filing with the SEC.

BMO Nesbitt Burns, RBC Dominion Securities and TD Securities Inc. were the bookrunners.

The notes are guaranteed by the Federal Republic of Germany.

KfW is a government-backed bank based in Frankfurt.

AT&T unchanged

AT&T’s 4.5% notes due March 1, 2029 were wrapped around issuance at 170 bps bid in secondary trading on Thursday, a market source said.

The company sold $3 billion of the 10-year notes on Wednesday in line with guidance at a spread of Treasuries plus 170 bps. The notes were initially talked to price in the Treasuries plus 187.5 bps area.

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.