Strong new bond supply forecast for week ahead; AT&T notes tightens; American Express mixed

By Cristal Cody

Tupelo, Miss., July 28 – Activity in the high-grade bond market stayed quiet on Friday following the year’s largest corporate bond offering from AT&T Inc., which priced $22.5 billion of notes in seven tranches in the previous session.

Deal supply is expected to stay strong in the week ahead with market sources predicting about $25 billion of issuance.

AT&T’s bonds (Baa1/BBB+/A-) priced to help fund the company’s acquisition of Time Warner Inc. traded about 2 basis points to 6 bps tighter in the secondary market on Friday.

American Express Credit Corp.’s $2.25 billion of five-year fixed- and floating-rate senior notes (A3/BBB+/A) priced on Thursday traded flat to about 3 bps better.

The Markit CDX North American Investment Grade index closed slightly weaker at a spread of 58 bps.

AT&T firms

AT&T’s 3.4% notes due Aug. 14, 2024 traded on Friday at 126 bps bid, 123 bps offered, a market source said.

The $3 billion tranche priced on Thursday at a Treasuries plus 130 bps spread.

The company’s 3.9% notes due Aug. 14, 2027 firmed to 156 bps bid, 153 bps offered in the secondary market.

AT&T sold $5 billion of the notes at a spread of 160 bps over Treasuries.

The telecommunications company is based in Dallas.

American Express mixed

American Express Credit’s 2.5% notes due Aug. 1, 2022 traded on Friday at 65 bps bid, 62 bps offered, according to a market source.

The company sold $1.85 billion of the notes on Thursday at a spread of Treasuries plus 68 bps.

America Express’ $400 million of five-year floating-rate notes traded wrapped around issuance at Libor plus 61 bps bid.

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

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