Alabama Power notes price; Fannie Mae on deck; Family Dollar notes ‘not very reactive’

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 20 – The slower pace of the high-grade primary market continued on Wednesday as the market focused on the release of the minutes from the Federal Reserve’s July policy meeting.

Alabama Power Co. sold the day’s lone new issue, coming to market with a $400 million offering of 30-year senior bonds.

The notes sold tighter than talk, which was set at Treasuries plus 100 bps to 115 bps.

In other market action on Wednesday, Fannie Mae announced plans to price a three-year offering of Benchmark Notes this week.

Investment-grade credit spreads ended mostly unchanged to modestly softer with traders focused on the Federal Reserve July policy meeting minutes and others out for summer vacations, sources said.

The Markit CDX North American Investment Grade series 22 index was less than 1 basis point wider at a spread of 57 bps.

Alabama Power’s new 4.15% bonds due 2044 tightened 3 bps in aftermarket trading, a trader said.

Dollar General Corp.’s bonds continue to remain active in the secondary market following Monday’s $9.7 billion cash bid to acquire Family Dollar Stores, Inc.

Dollar Tree Inc. announced weeks earlier that it would acquire Family Dollar for $8.5 billion in cash and stock.

Family Dollar’s 5% senior notes due 2021 are “not very reactive,” a trader said. “It’s the only issue they have outstanding, and it doesn’t trade very often at all.”

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