Lloyds, AvalonBay, FHLB price notes; supply thins; Assurant holds investor deal calls

By Cristal Cody

Tupelo, Miss., March 15 – Reported deal action remained light in the high-grade bond market on Thursday for a third straight session after heavy volume at the start of the week.

Lloyds Banking Group plc priced $1.5 billion of 4.375% 10-year senior notes (A3/BBB+/A+) at a spread of 160 basis points over Treasuries.

AvalonBay Communities, Inc. sold $300 million of 30-year medium-term notes.

Also, the Federal Home Loan Bank System priced $3 billion of two-year Global Notes.

Elsewhere on Thursday, Assurant Inc. (Baa2/BBB+/) began holding fixed-income investor calls for a three-tranche bond offering, a source said. The investor calls are scheduled to continue on Friday.

The company plans to price five- and 10-year notes and one tranche of 30-year fixed-to-floating-rate subordinated notes.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC and U.S. Bancorp Investments Inc. are the bookrunners.

High-grade supply has thinned following heavy volume on Monday when more than $14 billion of bonds priced. On Wednesday, Sprint Corp. and McDonald’s Corp. tapped the primary market.

The Markit CDX North American Investment Grade 29 index ended modestly tighter at a spread of 55 bps.

AvalonBay prices $300 million

AvalonBay Communities sold $300 million of 4.35% 30-year medium-term notes (A3/A-/) in the offering at 99.814, according to an FWP filing with the Securities and Exchange Commission.

UBS Securities LLC and BofA Merrill Lynch were the bookrunners.

Proceeds will be used to reduce debt under AvalonBay’s $1.5 billion unsecured revolving credit facility and for general corporate purposes, including the acquisition, development and redevelopment of apartment communities and repayment and refinancing of other debt.

The manager and developer of apartment communities is based in Arlington, Va.

Funds back in the green

Investment-grade corporate funds saw a solid $2.316 billion net inflow for the week to March 14, more than reversing the $740 million net outflow figure seen the previous week, according to sources familiar with the fund-flow statistics generated by AMG Data Services Inc.

Last week’s outflow was the second seen in the last five weeks by the corporate funds, a relative rarity in the data reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

The previous week the funds gained $1.37 billion and they saw a $1.57 billion inflow during the Feb. 21 week, which had followed a $790 million cash loss during the Feb. 14 week. That outflow had been the first downturn after 21 straight weeks of gains dating back to mid-September, according to a Prospect News analysis of the data.

This week’s funds influx raises the year-to-date net inflow figure for the IG corporates to $22.62 billion from last week’s $20.29 billion, setting a new peak level for the year so far.

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