Morning Commentary: BB&T offers fixed-rate notes following floater sale; primary action thin

By Cristal Cody

Tupelo, Miss., May 31 – BB&T Corp. plans to return to the primary market on Thursday with an offering of three- and seven-year fixed-rate notes.

On Friday, BB&T priced $250 million of three-year senior medium-term floating-rate notes (A2/A-/A+) at par to yield Libor plus 32 basis points.

Otherwise, market activity was light over the morning following about $3.4 billion of high-grade issuance on Wednesday from L3 Technologies, Inc., Southern California Edison Co., Dominion Energy, Inc. and MetLife Inc.

The new issues priced “at a very wide concession of +17 bps along with a roughly -4 bps break performance, much weaker than last week's +4 bps and -6 bps numbers, respectively,” BofA Merrill Lynch analysts said in a note released Thursday. “Also today we saw the return of meaningful 1-3 year BWIC activity and dealers ended up net buying about $900 [million]of such paper.”

The primary market stayed quiet on Tuesday with no reported deals following the long holiday weekend.

Syndicate sources had expected about $20 billion of volume over the week.

At least one issuer is holding a roadshow this week for an upcoming deal. Hyundai Capital America (Baa1/A-) will conclude its fixed income investor meetings in the United States, Europe and Asia for a Rule 144A and Regulation S dollar-denominated note offering on Friday, a source said.

BofA Merrill Lynch, Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Societe Generale CIB and RBC Capital Markets, LLC are the arrangers.

While supply has been thin, the secondary market has been more active. On Wednesday, secondary trading volume totaled $21.91 billion, up from $16.94 billion of investment-grade bonds traded on Tuesday, according to Trace.

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