Brixmor prices notes; Oesterreichische Kontrollbank in deal pipeline; Barclays improves

By Cristal Cody

Tupelo, Miss., Aug. 28 – High-grade supply remained light on Tuesday with one reported deal brought to the primary market.

Brixmor Operating Partnership LP priced $250 million of long three-year senior floating-rate notes.

Crombie Real Estate Investment Trust also tapped the Canadian high-grade market on Tuesday with a C$75 million add-on to its 3.962% senior notes due June 1, 2021.

At least one investment-grade bond deal is in the works to print on Wednesday.

Oesterreichische Kontrollbank AG is marketing a benchmark-sized offering of three-year global notes.

Syndicate sources predict up to about $5 billion of bond issuance for the week in front of the Labor Day holiday.

On Monday, Caterpillar Financial Services Corp. was the sole reported high-grade issuer with a $750 million reopening of medium-term floating-rate notes due March 15, 2021.

Overall investment-grade volume is expected to reach $1.17 trillion for the year, down from $1.39 trillion in 2017, according to a BofA Merrill Lynch research note released on Tuesday. High-grade new issue volumes have averaged $1.22 trillion per year since 2013.

Industrial issuers account for nearly 60% of the market, while financials make up 34% and utilities another 8%, according to the report.

CDX indices make up the most liquid part of the market, averaging $22.3 billion in daily trading volumes since 2013, above high-grade bonds, at $14.8 billion, and single-name CDS, at $3.1 billion, the note said.

“Since 1997, high-grade index spreads have averaged 155 [basis points], ranging between 53 bps in October of 1997 and 622 bps in December of 2008,” according to the note. “The current spread is 119 bps. Default rates for high-grade bonds are very low, with default losses averaging just 13 bps per year historically, highlighting that mark to market risk – including liquidity risk – is the most important driver of high-grade spreads.”

The Markit CDX North American Investment Grade 30 index ended mostly unchanged at a spread of 59 bps.

In secondary trading over the session, Barclays plc’s paper tightened about 1 bp to 5 bps, a source said.

Other bank and financial paper was mostly flat to about 1 bp better on the day.

Brixmor sells floaters

Brixmor Operating Partnership priced $250 million of senior floating-rate notes due Feb. 1, 2022 (Baa3/BBB-/BBB-) on Tuesday at par to yield Libor plus 105 bps, according to an FWP filing with the Securities and Exchange Commission.

J.P. Morgan Securities LLC and Citigroup Global Markets Inc. were the bookrunners.

New York City-based Brixmor is the operating partnership through which Brixmor Property Group Inc. operates and holds real estate assets.

OKB eyes deal

Oesterreichische Kontrollbank (Aa1/AA+/) plans to price a benchmark-sized offering of three-year global notes on Wednesday, according to a market source.

The notes were initially talked to price in the mid-swaps plus 6 bps area.

Deutsche Bank Securities Inc., J.P. Morgan Securities and RBC Capital Markets, LLC are the lead managers.

Vienna-based OKB provides financial and information services to Austria’s export industry and the capital market.

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