New-issue action falls off after flurry of activity; Danske brings $1 billion of tier 2 notes

By Sheri Kasprzak and Aleesia Forni

New York, Sept. 13 - Primary action was relatively subdued on Thursday after a major day of pricing activity on Wednesday. A large offering from Danish bank Danske Bank A/S led the lighter pricing activity.

On Wednesday, $11.6 billion of new issues hit the market, said Jody Lurie, corporate credit analyst with Janney Montgomery Scott LLC.

"The majority of credits to come to market, however, were financial firms, including foreign banks, insurers, REITs and asset managers, an interesting trend considering today's FOMC meeting," Lurie said.

Trading in the secondary market was rather muted early in the session, one trader said.

"[I] don't expect much ahead of the Fed, especially following the barrage of new issues lately," the trader said.

Another market source did see some activity in Goldman Sachs Group, Inc.'s 30-year bonds due 2037 later in the session.

The bonds were among the day's most active deals, and they were quoted 9 basis points tighter at 324 bps bid near the day's close, a market source said. They saw a good deal of activity on Wednesday as well.

Goldman priced the $2.5 billion of 6.75% bonds at 190 bps over Treasuries in September 2007.

Danske brings $1 billion

Heading up Thursday's lighter calendar, Danske Bank sold $1 billion of 25-year tier 2 senior notes, said term sheets.

The 7.125% notes (Baa1/A-/BBB) are due Sept. 21, 2037 and were priced at par. The coupon rate for the notes will reset every five years.

BNP Paribas Securities Corp., Danske Bank, HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC and UBS Securities LLC were the bookrunners.

Based in Copenhagen, Danske is Denmark's largest bank.

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