Colgate-Palmolive sells in two parts; issuance expected to increase in May; AT&T notes mixed

By Andrea Heisinger and Cristal Cody

New York, April 29 - Colgate-Palmolive Co. closed out the week and month with a sale in two parts on Friday.

The consumer products company sold $500 million split evenly between three-year notes and a six-year maturity.

Issuance is expected to jump in the coming week as more corporate and financial names come out of earnings blackout. The issuance total for the week ended Friday - at upwards of $13 billion - exceeded the $7 billion to $12 billion estimate from some syndicate desks but was in line with others that capped it at $15 billion.

Companies could start selling as soon as Monday provided conditions are right, one source said, and all desks are expecting more volume. There is between $15 billion and $20 billion expected for the coming week, according to one syndicate desk's estimate.

Another source said her desk had "a few things" on tap for the coming week but nothing firm.

"I think we'll be busier the following week," she said. Holidays in Asia combined with a Monday holiday for some in England following the royal wedding were the reasons cited.

The series 14 Markit CDX North American Investment Grade index ended the week 2 basis points tighter at a spread of 88 bps, according to Markit Group Ltd.

In the secondary market, Colgate-Palmolive's notes firmed, while AT&T Inc.'s new notes began to lose some traction after tightening all week, according to sources.

Overall investment-grade Trace volume dropped more than 15% to about $11 billion, a bond market source said.

Treasuries made positive gains on lackluster trading on the last trading day of the month, a source said. The 10-year benchmark note yield dropped 2 bps to 3.29%, and the 30-year bond yield fell 1 bp to 4.4%.

"Very slow day. We had a narrow range," a source said.

Colgate prices two tranches

Colgate-Palmolive priced $500 million of notes (Aa3/AA-/AA-) in two parts, an informed source said.

The $250 million of 1.25% three-year notes priced at a spread of Treasuries plus 30 bps. This was in line with talk in the 30 bps area.

A second tranche was $250 million of 2.625% six-year notes that sold at Treasuries plus 77 bps. They priced at the tight end of guidance in the 80 bps area.

The bookrunners for the three-year piece were BNP Paribas Securities Corp., BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Merrill Lynch. Those for the six-year tranche were Citigroup, Goldman Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch, Morgan Stanley & Co., Inc. and RBS Securities Inc.

Proceeds are being used for general corporate purposes.

In secondary trading, the three-year notes firmed to 29 bps bid, 24 bps offered, a trader said.

The six-year tranche traded tighter at 74 bps bid, 70 bps offered.

The consumer products company is based in New York.

AT&T flat

AT&T's new five-year notes stayed stronger than issue price in secondary trading but came in some from previous trading levels, while the 10-years stayed flat on Friday, according to a trader.

AT&T's 2.95% notes due 2016 traded Friday at 92 bps bid, 90 bps offered, a little wider than Thursday's quote of 91 bps bid, 88 bps offered. The notes priced at 97 bps plus Treasuries on Tuesday.

AT&T's second tranche of 10-years was unchanged from Thursday. The 4.45% notes due 2021 traded late afternoon at 109 bps bid, 108 bps offered. The notes priced at 115 bps over Treasuries.

The telecommunications company is based in Dallas.

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