Motorola prices add-on; Comcast eyes major deal; heavy supply forecast; new bonds mixed

By Cristal Cody

Tupelo, Miss., Sept. 28 – Motorola Solutions, Inc. priced a $200 million reopening of its 4.6% senior notes due Feb. 23, 2028 on Friday, capping off a light week that missed supply estimates.

High-grade issuers priced nearly $12 billion of bonds during the week, coming in lower than market forecasts for about $15 billion to as much as $25 billion of supply.

The week ahead, though, is expected to ramp up significantly.

Comcast Corp. plans to hold fixed-income investor calls on Monday for a possible bond offering that could total as much as $27 billion.

About $40 billion to $45 billion of supply is forecast for the week ahead, according to market sources.

The Markit CDX North American Investment Grade 31 index closed mostly unchanged at a spread of 59 basis points.

In the secondary market, new issues priced this week were mixed.

Motorola’s notes firmed modestly.

Tyson Foods, Inc.’s senior notes (Baa2/BBB/BBB) priced on Tuesday were mostly flat to about 1 bp softer on Friday but remained about 3 bps to 8 bps tighter than issuance.

Royal Bank of Scotland Group plc’s $1.75 billion of 5.076% fixed-to-floating-rate senior notes due Jan. 27, 2030 were flat from issuance.

Motorola reopens

Motorola Solutions priced a $200 million reopening of its 4.6% senior notes due Feb. 23, 2028 (Baa3/BBB-/BBB-) on Friday at a spread of 185.5 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 97.75 to yield 4.901%.

Motorola originally sold $500 million of the notes at 99.833 to yield 4.621%, or a spread of Treasuries plus 170 bps, on Feb. 21, 2018. The total outstanding is now $700 million.

Deutsche Bank Securities Inc., BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the bookrunners.

In the secondary market, the notes firmed to 185 bps bid, 180 bps offered, a source said.

Motorola is a telecommunications company based in Schaumburg, Ill.

Comcast sets investor calls

Comcast (A3/A-/A-) plans to hold fixed-income investor calls on Monday for a multiple tranche offering that could be in the $20 billion to $27 billion area, according to a market source.

BofA Merrill Lynch and Wells Fargo Securities LLC are the arrangers.

Comcast announced a week ago it offered $39 billion for Sky plc, a London-based media and telecommunications company, winning the bid away from Twenty-First Century Fox, Inc.

Comcast is a media and technology company based in Philadelphia.

Tyson Foods active

Tyson Foods’ 5.1% notes due Sept. 28, 2048 eased about 1 bp to 182 bps bid on Friday, a market source said.

Tyson sold $500 million of the 30-year notes on Tuesday at a Treasuries plus 190 bps spread.

The meat and food production company is based in Springdale, Ark.

RBS unchanged

Royal Bank of Scotland Group’s 5.076% fixed-to-floating-rate senior notes due Jan. 27, 2030 remained wrapped around issuance at 200 bps bid in the secondary market on Friday, a source said.

The bank sold $1.75 billion of the notes (Baa2/BBB-/BBB+) on Monday at par to yield a Treasuries plus 200 bps spread.

The coupon will convert to a floating rate of Libor plus 190.5 bps on the Jan. 27, 2029 optional redemption date.

Royal Bank of Scotland Group is a banking and financial services company based in Edinburgh, Scotland.

Inflows improve

Elsewhere, investment-grade inflows improved this week.

“Inflows to U.S. high grade bond funds and ETFs rebounded” to $1.67 billion for the week ended Wednesday from $520 million in the prior week, according to BofA Merrill Lynch analyst Yunyi Zhang in a note released on Friday.

The gain was led by inflows of $1.1 billion for this week compared to outflows of $710 million a week ago for the high-grade space, which includes corporates, mortgages, agencies and Treasuries.

“Short-term high grade continued to experience inflows” also, according to the note. Short-term high grade had inflows up to $1.39 billion in the past week from $570 million a week earlier, while high grade outside short-term flows turned positive to $280 million from a $60 million outflow the prior week, Zhang said.

For the week ended Sept. 26, Lipper US Fund Flows reported inflows of $1.78 billion for corporate investment-grade funds, up from inflows of $1.02 billion in the previous week.

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