High-grade supply thin with focus on rate hike; Vodafone launches deal; new issues firm

By Cristal Cody

Tupelo, Miss., Sept. 26 – High-grade primary action slowed on Wednesday with the focus on the Federal Reserve’s monetary policy decision and rate hike.

The Federal Open Market Committee raised rates by 25 basis points.

In deal action, Vodafone Group plc launched an offering of three tranches of hybrid notes on Wednesday, including up to $1.25 billion of 6.25% dollar-denominated notes.

Otherwise, supply was quiet.

Week to date, high-grade issuers have priced nearly $10 billion of bonds.

About $20 billion to $25 billion of issuance was expected by market sources for the week.

The Markit CDX North American Investment Grade 31 index tightened 2 bps over the day to a spread of 61 bps.

In the secondary market, new issues priced this week are trading mostly tighter.

ING Groep NV’s $3.25 billion of senior notes (Baa1/A-/A+) priced in three tranches on Tuesday firmed about 3 bps.

International Flavors & Fragrances Inc.’s $1.5 billion three-tranche offering of notes brought on Monday traded about 5 bps to 8 bps tighter than issuance.

Elsewhere, bonds were mixed in the secondary market.

General Mills, Inc.’s 4.2% senior notes due April 17, 2028 headed out flat after tightening 6 bps on Tuesday.

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