Morning Commentary: FHLBank prices $2 billion; Altria, Charter notes up in early trading

By Cristal Cody

Tupelo, Miss., Dec. 19 – The Federal Home Loan Bank System priced $2 billion of two-year Global notes early Thursday.

Corporate supply continued to remain quiet over the morning with no high-grade bonds priced week to date.

Little activity is expected in the primary market for the remainder of the year, sources report.

About $1 billion to $3 billion of potential bond deal volume remains for December monthly syndicate forecasts, a source reported earlier in the week.

In early secondary trading on Thursday, Altria Group Inc.’s 4.8% senior notes due Feb. 14, 2029 (A3/BBB) climbed to 111.23 from where the notes went out on Wednesday at 110.76, a market source said.

Altria priced the notes as part of an $11.5 billion seven-tranche offering on Feb. 12, 2019 at 99.72 and a spread of Treasuries plus 215 basis points.

Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050 (Ba1/BBB-/BBB-) that were reopened earlier in the month also improved in the secondary market at the start of the day.

The notes rose to 104.53 in early trading after ending at 104.42 in the previous session, a market source said.

Charter priced a $1.3 billion add-on to the bonds on Dec. 2 at 101.964 to yield 4.677% and a spread of Treasuries plus 240 bps.

Subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. were the issuers.

Charter originally sold the notes in a $1.5 billion offering on Oct. 15 at 99.436 to yield 4.836% and a spread of Treasuries plus 260 bps. The total outstanding is now $2.8 billion.

Corporate high-grade trading volume edged up to $20.64 billion on Wednesday, compared to $20.44 billion on Tuesday and $18.87 billion on Monday, according to Trace data.

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