U.S. Bancorp prices as primary activity slows; U.S. Bancorp firms, Time Warner Cable flat

By Cristal Cody and Aleesia Forni

Virginia Beach, Jan. 27 - Primary activity slowed on Monday, as U.S. Bancorp priced a $2.75 billion issue of senior medium-term notes in three tranches.

The bank sold $700 million of three-year floaters at Libor plus 23 basis points and $1.3 billion of 1.1% three-year notes at Treasuries plus 35 bps.

A $750 million tranche of 3.7% 10-year notes priced with a spread of 95 bps over Treasuries.

Both fixed-rate tranches sold at the tight end of talk.

Issuance in the high-grade market so far in 2014 has been "overwhelming," a market source said on Monday.

"It's been a frantic few weeks," a source said. "We're certainly seeing some signs of fatigue developing."

Sources are expecting around $15 billion to $20 billion of issuance for the week, as the market focuses on the Federal Open Market Committee meeting beginning on Tuesday.

Investment-grade bond spreads headed out modestly tighter to unchanged, according to market sources.

"Closing flat to where we opened," a source said.

U.S. Bancorp's 3.7% notes due 2024 tightened 2 bps in aftermarket trading, a trader said.

In the secondary market, Time Warner Cable Inc.'s notes traded flat over the day, according to a market source.

U.S. Bancorp prices tight

U.S. Bancorp came to Monday's market with a $2.75 billion issue of senior medium-term notes, a market source said.

The sale included $700 million of floaters due 2017 priced with a spread of Libor plus 23 bps.

There was also $1.3 billion of 1.1% three-year notes sold at Treasuries plus 35 bps.

A $750 million tranche of 3.7% 10-year notes priced with a spread of 95 bps over Treasuries.

Both fixed-rate tranches sold at the tight end of talk.

Going out Monday afternoon, U.S. Bancorp's 3.7% notes due 2024 tightened to 93 bps bid, 91 bps offered, a trader said.

The tranche of 1.1% notes due 2017 were not immediately active in aftermarket trading.

U.S. Bancorp Investments, Inc. was the joint bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in Minneapolis.

Time Warner Cable flat

Time Warner Cable's 4.125% senior notes due 2021 traded flat on the day at 225 bps, a market source said.

The notes have widened since quoted on Nov. 26 at 205 bps bid, 185 bps offered with Comcast Corp. moving forward in its takeover attempt of Time Warner Cable, a source said. Time Warner Cable has rejected Comcast's offer of $132.50 a share.

Time Warner Cable (Baa2/BBB/BBB) sold $700 million of the 4.125% notes due 2021 in 2010 at a spread of 155 bps over Treasuries.

The broadband communications company is based in New York City.

Bank/brokerage CDS costs unchanged to higher

Investment-grade bank and brokerage CDS prices were unchanged to higher, according to a market source.

Bank of America Corp.'s CDS costs ended flat at 90 bps bid, 93 bps offered. Citigroup Inc.'s CDS costs eased 2 bps to 90 bps bid, 95 bps offered. JPMorgan Chase & Co.'s CDS costs closed unchanged at 76 bps bid, 79 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 45 bps bid, 50 bps offered.

Merrill Lynch's CDS costs were flat at 92 bps bid, 97 bps offered. Morgan Stanley's CDS costs eased 1 bp to 101 bps bid, 104 bps offered. Goldman Sachs Group, Inc.'s CDS costs widened 3 bps to 103 bps bid, 108 bps offered.

Paul Deckelman contributed to this review.

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