Municipality Finance planning bond offering; Xerox tightens; Burlington Northern stable

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 1 – Finland’s Municipality Finance plc gave the investment-grade primary market its only signs of life on Tuesday.

The company announced price guidance for a planned offering of bonds that is expected to price later this week.

Away from that deal, primary activity remained muted to kick of the new month on Tuesday as stocks plummeted on continued fears of a slowdown in China.

Sources predict the slower pace of the primary to continue this week ahead of the all-import jobs data, which will be the focus at week’s end, as well as the coming Labor Day weekend.

Market tone remained volatile, and high-grade bonds were mixed in secondary trading over the session.

Xerox Corp.’s 3.5% senior notes due 2020 tightened 7 basis points in the secondary market.

Philip Morris International Inc.’s 3.375% senior notes due 2025 traded about 1 bp better.

Burlington Northern Santa Fe LLC’s debentures (A3/BBB+) were mostly unchanged.

The Markit CDX North American Investment Grade index eased 2 bps to a spread of 84 bps on Tuesday.

The primary market saw Municipality Finance set price talk for a planned benchmark offering of notes (Aaa/AA+) due Sept. 10, 2018 on Tuesday in the mid-teens bps area over mid-swaps, an informed source said.

The deal is expected to price on Wednesday.

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

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