Midday Commentary: NBCUniversal on tap as September nears record issuance, Watson tightens

By Andrea Heisinger

New York, Sept. 28 - New deals in the investment-grade bond market are not done for the week with NBCUniversal Media LLC announcing an offering of notes on Friday, adding to the market's already sizable issuance for September.

The media and entertainment company is planning to sell $2 billion of notes due 2022 and 2042.

This deal comes on the heels of two large offerings priced on Thursday by Watson Pharmaceuticals, Inc. and MetLife, Inc.

Those deals, along with NBC's, have pushed the month of September well over the predicted $100 billion mark, a source said.

"I think we hit that before Thursday," the source added.

The month will also top the record for monthly issuance in 2012, which had been set in March when about $108 billion in new paper was sold, the source said.

On the secondary side of the market, spreads were seen tighter at the open, but were wider by late morning in the New York session, a trader said.

"Spreads are pretty good today," she said. "The index is a little wider."

There could be some volatility later on Friday as the markets await results of stress tests on Spanish banks, the trader said.

"We also heard rumors that Spain could ask for a bailout after the close today," the trader added. "What a great way to end the week."

The three new tranches of Watson bonds were tighter than quoted in the gray market at the end of Thursday, a trader said.

As of late morning in the New York session, the 1.875% notes due 2017 were seen about 30 basis points tighter at a bid of 104 bps over Treasuries and offer of 101 bps. The notes priced at 135 bps over Treasuries.

A 3.25% note due 2022 from Watson was seen 24 bps better at 146 bps over Treasuries bid, and an offer of 144 bps, the trader said. The tranche was priced at 170 bps over Treasuries.

The 4.625% bonds due 2042 also moved tighter by 22 bps. The trader quoted the bonds at a bid of 168 bps over Treasuries and offer of 165 bps. The bonds sold at 190 bps over Treasuries.

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