Primary hosts Toyota, Stifel; Toyota Motor Credit firms; Time Warner Cable trades

By Aleesia Forni and Cristal Cody

Virginia Beach, July 15 – Financial issuers continued to dominate the high-grade primary market on Tuesday.

The session saw Toyota Motor Credit Corp. and Stifel Financial Corp. head to the bond market with new offerings.

Toyota Motor Credit raised $1.25 billion of notes during the session, while Stifel Financial priced an upsized offering of senior notes due 2024.

A source noted that Toyota’s offering sold at the tight end of talk and garnered an orderbook that was nearly two times oversubscribed.

Financial names have made up the bulk of new issuance this week, with around $4.6 billion of the week’s $6 billion of supply coming from the financial sector.

Expectations for total issuance this week are around $20 billion.

Investment-grade bonds were mixed over the day in light activity, according to market sources.

In aftermarket trading, Toyota Motor Credit’s 2.125% notes due 2019 tightened 2 basis points on the bid side, a trader said.

Stifel Financial's new offering was not seen in late afternoon trading, according to a trader.

Time Warner Cable Inc.’s long bonds (Baa2/BBB/BBB) remained active in the secondary market over the day, according to a trader.

The company’s bonds traded more heavily over the past two sessions on concerns regulatory authorities will not approve its merger with Comcast Corp., market sources said.

Toyota prices $1.25 billion

Toyota Motor Credit sold a $1.25 billion issue of 2.125% medium-term notes (Aa3/AA-/), series B, due 2019 at the tight end of talk with a spread of Treasuries plus 50 bps, according to a market source and an FWP filed with the Securities and Exchange Commission.

The notes priced at 99.727 to yield 2.183%.

Toyota Motor Credit’s 2.125% notes due 2019 tightened to 48 bps bid, 46 bps offered in the secondary market, a trader said.

Barclays, BofA Merrill Lynch and RBC Capital Markets LLC were the joint bookrunners.

The U.S. funding arm of Toyota is based in Torrance, Calif.

Stifel upsizes

The primary also saw Stifel Financial price an upsized $300 million of 4.25% 10-year senior notes with a spread of Treasuries plus 180 bps on Tuesday, according to an FWP filed with the SEC.

The notes (/BBB-/BBB-) priced at 99.196 to yield 4.35%.

BofA Merrill Lynch and Keefe, Bruyette & Woods are the joint bookrunners.

Proceeds will be used for general corporate purposes.

Stifel is a St. Louis-based full-service retail and institutional brokerage and investment bank.

Time Warner Cable active

Time Warner Cable’s 4% notes due 2021 have tightened to 35 bps offered, a trader said on Tuesday.

“Not many trades,” the trader said. “All odd lots.”

The notes have come in from where they traded in February at 77 bps bid, 72 bps offered following the company’s announcement that it will be acquired by Comcast in a $45.2 billion all-stock deal.

The seven-year notes ended the session at 106.27 to yield 2.984%, compared to where the paper closed on Monday at 106.237 to yield 2.99%, according to a market source.

Time Warner Cable sold $1 billion of the seven-year notes on Sept. 7, 2011 at a spread of 210 bps over Treasuries, or 99.109, to yield 4.11%.

The company’s long bonds were more active over the session but ended mostly unchanged, market sources said.

Time Warner Cable’s 4.5% senior debentures due 2042 traded going out in the 129 bps area, unchanged from the morning, sources said.

The debentures ended the session at 97.54 to yield 4.657%, slightly down from where the bonds closed at 97.64 to yield 4.651% on Monday, according to a market source.

Time Warner Cable sold $1.25 billion of the debentures on Aug. 7, 2012 at a spread of Treasuries plus 183 bps, or 99.439, to yield 4.534%.

The broadband communications company is based in New York City.

Bank/brokerage CDS costs lower

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

Bank of America Corp.’s CDS costs ended 2 bps lower at 67 bps bid, 70 bps offered. Citigroup Inc.’s CDS costs declined 1 bp to 65 bps bid, 68 bps offered. JPMorgan Chase & Co.’s CDS costs were 1 bp lower at 53 bps bid, 56 bps offered. Wells Fargo & Co.’s CDS costs were flat at 43 bps bid, 48 bps offered.

Merrill Lynch’s CDS costs closed 2 bps tighter at 71 bps bid, 75 bps offered. Morgan Stanley’s CDS costs lowered 2 bps to 67 bps bid, 70 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 3 bps lower at 70 bps bid, 75 bps offered.

Paul Deckelman contributed to this review.

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