Investment-grade deal volume forecast hard to peg; American Express firms; AT&T mostly flat

By Cristal Cody

Eureka Springs, Ark., Oct. 28 – Activity in the investment-grade market stayed fairly quiet on Friday with market expectations for deal volume in the week ahead ranging from as low as $15 billion to as high as $35 billion for the last full week before the U.S. presidential election.

“We’re calling for $15 [billion] to $20 billion,” one syndicate source said. “A lot of issuers were in the market over the past four weeks, and supply was about $30 billion this week. There’s been a lot of market people who just don’t think there may be as many deals next week as there was this week.”

Still, as another market source noted, issuers may try to price ahead of the election.

In the secondary market, new bonds priced over the week traded mostly tighter.

American Express Credit Corp.’s 1.7% senior medium-term notes due 2019 firmed about 5 basis points.

United Technologies Corp.’s senior notes (A3/A-/) priced in five tranches on Thursday were mixed.

Danone SA’s $5.5 billion of notes (Baa1/BBB+/) priced in four tranches on Wednesday traded flat to about 3 bps better than issuance on Friday.

AT&T Inc.’s 4.125% notes due 2026 were mostly stable on Friday, while Time Warner Inc.’s 2.95% notes due 2026 headed out modestly weaker on the day. The companies’ bonds remained wider from the previous week on AT&T’s plans to acquire Time Warner in an $85.4 billion cash-and-stock deal.

Credit spreads softened over the session. The Markit CDX North American Investment Grade index closed about 2 bps weaker at a spread of 78 bps.

American Express firms

American Express Credit’s 1.7% notes due 2019 firmed from issuance to 68 bps bid, 65 bps offered, according to a market source on Friday.

The company sold $750 million of the three-year notes (A2/A-/A) on Wednesday at a spread of Treasuries plus 73 bps.

American Express Credit is a New York City-based credit card services provider.

United Technologies mixed

United Technologies’ 1.95% notes due 2021 headed out on Friday at 63 bps bid, 61 bps offered, a market source said.

The company sold $750 million of 1.95% five-year notes on Thursday at Treasuries plus 65 bps.

United Technologies’ 3.75% notes due 2046 were quoted trading at 119 bps bid, 117 bps offered on Friday.

The company priced $1.1 billion of the 30-year notes in Thursday’s sale at a spread of 118 bps plus Treasuries.

United Technologies is a Hartford, Conn.-based company that provides technology products and services to the building and aerospace industries.

Danone improves

Danone’s 2.947% notes due 2026 traded on Friday afternoon at 113 bps bid, 110 bps offered in the secondary market, a source said.

Danone sold $2 billion of the 10-year notes on Wednesday at a spread of Treasuries plus 115 bps.

The food products company is based in Paris.

AT&T mostly flat

AT&T’s 4.125% notes due 2026 headed out on Friday mostly unchanged at 160 bps bid, according to a market source.

The notes traded on Oct. 21 ahead of the merger announcement at 146 bps bid.

The company priced a $900 million reopening of the bonds on May 3 at Treasuries plus 150 bps.

The notes originally were sold on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.

AT&T is a Dallas-based telecommunications company.

Time Warner modestly weakens

Time Warner’s 2.95% notes due 2026 were seen on Friday slightly softer at 129 bps bid, a market source said.

The 10-year notes had widened to 138 bps bid on Monday from 112 bps bid on Oct. 21.

The company sold $800 million of the notes on May 5 at a spread of 135 bps over Treasuries.

Time Warner is a New York-based media and entertainment company.

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