Mizuho prices sole high-grade deal as lull continues; Verizon mixed; Time Warner Cable firms

By Cristal Cody and Aleesia Forni

Virginia Beach, March 20 - The lull in high-grade market activity following the Federal Reserve's statement continued on Thursday.

Mizuho Financial Group Inc. priced the lone high-grade deal during the session, selling a $1.5 billion issue of 4.6% subordinated tier 2 bonds due March 27, 2024.

The notes sold with a spread of Treasuries plus 185 basis points, according to a market source.

Thursday's sole deal was met with solid demand, the source said, attracting an orderbook that was more than six times oversubscribed.

The notes sold at the tight end of talk, which was set in the area of Treasuries plus 187.5 bps, having tightened from earlier guidance of Treasuries plus 187.5 bps to 200 bps.

In other market news on Thursday, Freddie Mac said that it would not issue new Reference Notes in March.

Amidst the slow-down in primary activity, Lipper reported inflows of $2.203 billion into corporate investment-grade funds for the week ending March 19.

This compares to $3.156 for the week ended March 12 and brings the year-to-date total to $27 billion.

Bonds were mixed on the day, according to market sources.

The Markit CDX North American Investment Grade index rolled to a new series on Thursday. The series 22 high-grade index rose 8 bps to a spread of 72 bps.

Verizon Communications Inc.'s bonds (Baa1/BBB+/A-) were mixed in secondary trading, a source said.

Time Warner Cable Inc.'s 4.125% notes due 2021 continue to trade better on the week, a source said.

Mizuho prices tight

Mizuho Financial Group priced $1.5 billion of 4.6% 10-year subordinated tier 2 bonds (/BBB+/BBB) at Treasuries plus 185 bps, a market source said on Thursday.

Pricing was at 99.754 to yield 4.631%.

The notes, issued by wholly owned subsidiary Mizuho Financial Group (Cayman) 3 Ltd., priced at the tight end of the Treasuries plus 187.5 bps area talk, which had tightened from earlier guidance of Treasuries plus 187.5 bps to 200 bps.

Mizuho Securities, BofA Merrill Lynch, Goldman Sachs & Co. and J.P. Morgan Securities LLC managed the Rule 144A and Regulation S sale.

Mizuho Financial is based in Tokyo.

Freddie forgoes issuance

Freddie Mac announced on Thursday that it would not issue new Reference Notes in March, according to a press release.

The government-backed mortgage buyer is based in McLean, Va.

Verizon mixed

Verizon's bonds were mixed in the secondary market on Thursday, according to a market source.

The 6.35% notes due 2019 tightened to 84 bps bid from 87 bps bid on Tuesday.

The company sold $1.75 billion of the five-year notes in 2009 at a spread of Treasuries plus 387.5 bps.

Verizon's 6.25% bonds due 2037 widened 5 bps over the past two sessions to 157 bps bid, a source said.

The company sold $750 million of the bonds in 2007.

The telecommunications company is based in New York City.

Time Warner Cable firms

Time Warner Cable's 4.125% notes due 2021 (Baa2/BBB/BBB) tightened 7 bps over the last two sessions to 65 bps bid, according to a market source on Thursday.

The New York City-based broadband communications company sold $700 million of the notes in 2010 at Treasuries plus 155 bps.

Time Warner Cable's notes have tightened since the company announced in February it will be acquired by Comcast Corp. for $45.2 billion in stock.

Bank/brokerage CDS mostly rise

Investment-grade bank and brokerage CDS prices mostly rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 67 bps bid, 70 bps offered. Citigroup Inc.'s CDS costs eased 2 bps to 79 bps bid, 82 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 60 bps bid, 63 bps offered. Wells Fargo & Co.'s CDS costs rose 1 bp to 39 bps bid, 42 bps offered.

Merrill Lynch's CDS costs firmed 1 bp to 73 bps bid, 78 bps offered. Morgan Stanley's CDS costs eased 1 bp to 89 bps bid, 92 bps offered. Goldman Sachs Group, Inc.'s CDS costs rose 2 bps to 97 bps bid, 100 bps offered.

Paul Deckelman contributed to this review.

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