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Caterpillar Financial prices new issue, could be last one for August
By Andrea Heisinger
Omaha, Aug. 29 - Caterpillar Financial Services Corp. was the lone new issue Wednesday, and some sources predicted it may be the last one for the week and month of August.
The $400 million offering of 10-year 5.85% medium-term notes priced at a spread of Treasuries plus 130 basis points. The price is 99.978 with a yield of 5.853%.
Recent stability in the investment-grade market had fueled predictions that Wednesday would be a window of opportunity and see a glut of new deals pricing.
"It was really surprising to me that there weren't more," a market source said. "The market today was better than yesterday."
Issues from AT&T Inc., with $2 billion in global notes, and NiSource Finance Corp., with $800 million in notes, that priced Tuesday were trading at spreads unchanged from what they priced at, a market source said. AT&T priced at Treasuries plus 167 bps and NiSource at Treasuries plus 187.5 bps.
Others from Macy's Retail Holdings Inc. and Capital One Financial Corp. were each trading 5 bps wider, a source said. Macy's had $350 million in notes that priced at Treasuries plus 165 bps, and Capital One had $1.5 billion in senior notes that priced at Treasuries plus 225 bps.
"Secondary cash is not trading at all today," a market source said. "It's really dead out there."
The source said Capital One was doing particularly badly because "the mortgage companies are getting beat up today."
For the most part investment-grade was faring well, with one market source saying the tone was positive in credit and stocks continued to rally.
One source predicted the issue from Caterpillar could be the last for the week as companies opt to wait until after the long Labor Day weekend.
"Everybody's kind of holding out now until September," the source said.
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