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Investment-grade sees action both large and small; Deutsche Bank, AmEx, Coventry among new issuers
By Andrea Heisinger
Omaha, Aug. 22 - New issues, both large and small, were plentiful Wednesday with Deutsche Bank AG, London Branch, American Express Co., Coventry Health Care, Inc., and Lincoln National Corp. all pricing notes.
An issue of enhanced trust preferred securities from National City Corp. was also announced, but did not price Wednesday.
Deutsche Bank's $3 billion issue of 6% 10-year notes priced at a spread of Treasuries plus 145 bps. They had a yield of 6.068% and price of 99.495.
The $1.5 billion issue of 6.15% 10-year notes from American Express priced late in the session at Treasuries plus 155 bps with a yield of 6.185% and price of 99.742.
Coventry's issue, upsized to $400 million from $300 million, of 6.3% senior notes due Aug. 15, 2014, priced at a spread of Treasuries plus 190 bps with a yield of 6.377% and price of 99.575.
The smaller, $300 million, issue of 5.65% five-year senior notes from Lincoln National priced at a spread of Treasuries plus 135 bps. They yielded 5.699% with a price of 99.789.
"It was rather busy," one market source said. "There were lots of big deals, but a lot of small deals, too."
He estimated there was nearly $8 billion in new issues for the day.
Many of the companies went with 10-year bonds when they normally would have gone with two or three year floaters, which one source said he found surprising since buyers are being more cautious.
Recent volatility in the commercial paper market is pushing companies to issue the longer-term bonds, the source said.
Recent volatility in the commercial paper market is pushing companies to issue the longer-term bonds, the source said, and causing investors to step back.
The yield on the 10-year Treasury bonds was 4.63% Wednesday, while about a month ago it was at 5.25%, a source said.
"Spreads are wider, but the coupon is the same," they said, adding that Thursday would see more new issues.
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