EBRD prices add-on as weather quiets activity; Time Warner Cable bonds come in; Comcast widens

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 13 - The winter storm slamming the East Coast helped keep a lid on issuance for the high-grade primary market on Thursday.

The session did see European Bank for Reconstruction and Development sell a $250 million add-on to its existing 1.625% notes due 2018 on Thursday.

The notes were priced with a spread of 1 basis point over mid-swaps.

Total issue size now sits at $1.25 billion.

Inter-American Development Bank was also in the market on Thursday with an issue of notes, though full details were not available at press time.

"Not much activity to speak of," a syndicate source said late during the session on Thursday.

With no new deals expected to price during Friday's session, the week's total supply is expected to fall short of earlier estimates.

Roughly $13 billion of supply has priced this week. Sources had predicted between $15 billion to $20 billion of new paper.

Time Warner Cable Inc.'s bonds (Baa2/BBB/BBB) tightened more than 100 bps on Thursday in the wake of the announcement it would merge with Comcast Corp. (A3/A-/A-), according to market sources.

Comcast (A3/A-/A-) will acquire Time Warner Cable in a $45.2 billion all-stock deal valued at $158.82 per share.

Charter Communications Inc. (Ba3/BB-/) had upped its hostile takeover attempt of Time Warner Cable by nominating 13 directors to the board on Tuesday.

Time Warner Cable rejected Stamford, Conn.-based Charter Communications' offer in January of $132.50 per share.

Time Warner Cable's bonds headed out about 110 bps to 130 bps better, a trader said.

Comcast's bonds widened 5 bps to 20 bps over the day, according to a trader.

Charter Communication's junk-rated bonds traded "up about 1½ points earlier in the morning on the back of the news," a market source said.

EBRD add-on

The European Bank for Reconstruction and Development priced a $250 million add-on to its existing 1.625% global notes (Aaa/AAA/AAA) due 2018 on Thursday at a spread of mid-swaps plus 1 bp, an informed source said.

Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Standard Chartered were the bookrunners.

The original $1 billion issue priced with a spread of mid-swaps flat on July 25.

The lender to banks, businesses and industries is based in London.

Time Warner Cable tightens

Time Warner Cable's 4% notes due 2021 tightened to 77 bps bid, 72 bps offered late Thursday, a trader said. The notes were seen on Wednesday trading in the 215 bps to 218 bps area.

The New York City-based broadband communications company sold $1 billion of the seven-year notes at a spread of 210 bps over Treasuries in 2011.

Time Warner Cable's 4.125% notes due 2021, which traded on Wednesday in the 215 bps area, tightened to 77 bps bid, 70 bps offered, a trader said.

Time Warner Cable sold $700 million of the 4.125% notes due 2021 at 155 bps over Treasuries in 2010.

The company's 6.75% notes due 2018 firmed to 65 bps offered in the secondary market on Thursday from 194 bps offered on Wednesday, a trader said.

Time Warner Cable sold $2 billion of the 6.75% notes due 2018 in 2008 at Treasuries plus 250 bps.

Comcast eases

Comcast's 2.85% notes due 2023 were "bouncing around" over the day on the deal news, a trader said.

The notes eased about 5 bps to 85 bps in the morning session and tightened to the high 70 bps area going out, the trader said.

Philadelphia-based Comcast sold $750 million of the notes on Jan. 8, 2013 at a spread of 100 bps over Treasuries.

Bank/brokerage CDS mostly rise

Investment-grade bank and brokerage CDS prices mostly rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 74 bps bid, 77 bps offered. Citigroup Inc.'s CDS costs eased 1 bp to 80 bps bid, 83 bps offered. JPMorgan Chase & Co.'s CDS costs firmed 1 bp to 63 bps bid, 66 bps offered. Wells Fargo & Co.'s CDS costs eased 1 bp to 40 bps bid, 43 bps offered.

Merrill Lynch's CDS costs rose 1 bp to 77 bps bid, 80 bps offered. Morgan Stanley's CDS costs eased 2 bps to 88 bps bid, 93 bps offered. Goldman Sachs Group, Inc.'s CDS costs rose 1 bp to 92 bps bid, 97 bps offered.

Paul Deckelman contributed to this review

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