MuniFin brings $1 billion deal; AT&T, Barclays paper unchanged; Kraft Heinz notes soften

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 1 – Finland’s Municipality Finance plc priced a $1 billion bond offering on Wednesday as primary activity continued its subdued pace.

Meantime, ADP Research Institute reported that companies added 190,000 workers to payrolls in August, below expectations of 200,000.

With the late-summer lull in full swing this week, sources expect issuers to come full force to the high-grade primary market following the extended Labor Day holiday weekend.

Even with the holiday falling later than usual this month, September is predicted to see roughly $100 billion to $110 billion of supply, sources say, with an eclectic mix of borrowers accessing the market.

However, players will be focused on the mid-month Federal Reserve policy meeting for a possible rate hike and note that the decision will play a role in the month’s ultimate supply total.

Investment-grade bonds headed out mostly flat to wider in secondary trading on Wednesday, while credit spreads improved.

AT&T Inc.’s 3.4% notes due 2025 were unchanged going out.

Kraft Heinz Co.’s 3.95% notes due 2025 traded 4 bps weaker over the day.

In the bank and financial sector, Barclays plc’s 5.25% senior notes due 2045 were flat.

Morgan Stanley’s 4% senior notes due 2025 traded about 1 bp weaker during the session.

JPMorgan Chase & Co.’s 3.9% senior holding company notes due 2025 widened about 8 bps.

The Markit CDX North American Investment Grade index firmed 1 bp to a spread of 83 bps on Wednesday.

MuniFin taps market

In primary news, Finland’s Municipality Finance priced $1 billion of 1.25% notes (Aaa/AA+) due Sept. 10, 2018 on Wednesday at mid-swaps plus 17 basis points, an informed source said.

The notes were guided in the mid-teens area over mid-swaps.

BNP Paribas, Citigroup Global Markets Inc., Daiwa and Nomura are the bookrunners for the Rule 144A and Regulation S deal.

The credit institution for the municipal sector and state subsidized housing is based in Helsinki.

Bank/brokerage CDS costs fall

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

Bank of America Corp.’s CDS costs declined 2 bps to 79 bps bid, 82 bps offered. Citigroup Inc.’s CDS costs were also down 2 bps at 90 bps bid, 93 bps offered. JPMorgan Chase’s CDS costs were 1 bp lower at 80 bps bid, 83 bps offered. Wells Fargo & Co.’s CDS costs decreased 1 bp to 58 bps bid, 63 bps offered.

Merrill Lynch’s CDS costs were 2 bps lower at 81 bps bid, 84 bps offered. Morgan Stanley’s CDS costs ended 1 bp lower at 90 bps bid, 93 bps offered. Goldman Sachs Group, Inc.’s CDS costs ended 1 bp lower at 98 bps bid, 101 bps offered.

AT&T paper flat

AT&T’s 3.4% notes due 2025 were quoted in late afternoon trading flat at 184 bps bid, a market source said.

The notes traded about 2 bps weaker earlier in the day at 179 bps offered.

AT&T sold $5 billion of the notes (/BBB+/A-) on April 23 at a spread of 150 bps over Treasuries.

The telecommunications company is based in Dallas.

Kraft Heinz eases

Kraft Heinz’s 3.95% notes due 2025 eased 4 bps in secondary trading to 162 bps bid, according to a market source.

Heinz sold $2 billion of the notes (Baa3/BBB-) at Treasuries plus 155 bps on June 23 ahead of the company’s merger with Kraft in July.

The combined food and beverage company is based in Pittsburgh and Northfield, Ill.

Barclays notes stable

Barclays’ 5.25% notes due 2045 were flat at 228 bps bid on Wednesday, according to a market source.

Barclays sold $1.5 billion of the bonds (Baa3/BBB/A) on Aug. 10 at a spread of Treasuries plus 235 bps.

The financial services company is based in London.

Morgan Stanley soft

Morgan Stanley’s 4% notes due 2025 eased about 1 bp to 158 bps bid, 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.

JPMorgan widens

JPMorgan Chase’s 3.9% notes due 2025 traded about 8 bps wider at 155 bps bid in the secondary market, a source said.

JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on July 14 at 155 bps over Treasuries.

The financial services company is based in New York City.

Paul Deckelman contributed to this review

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