Issuance frenzy to continue in week ahead; Citigroup, Apple firm; Time Warner flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 12 – Another active week for the investment-grade market closed on Friday with no new deals pricing.

The onslaught of issuance in the primary market continued this week, with more than $28 billion of high-grade paper pricing.

The total fell in line with what sources had predicted to be around a $25 to $30 billion week.

Two frenzied weeks to begin the month bring September’s total supply to more than $84 billion, on pace to pass the $100 billion mark next week.

However, sources throughout the week noted the market was showing clear signs of investor fatigue following the issuance avalanche.

Despite this, the pace of issuance is expected to continue in the week ahead.

“We’ve got the [Federal Open Market Committee meeting], but it should still be a loaded week,” a source said early Friday.

Around $25 billion of supply is expected to price next week.

In other news this week, corporate investment-grade funds saw inflows of $934 million for the week ended Sept. 10, according to Lipper, up from last week’s $408 million of inflows.

The year-to-date total is now $53.1 billion.

Investment-grade credit spreads were seen ending the day wider in light trading, sources said.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 60 bps.

Bonds were mixed during the session.

Citigroup Inc.’s 3.75% notes due 2024 tightened more than 10 bps over the day, a source said.

Apple Inc.’s 3.45% notes due 2024 tightened 4 bps in the secondary market, according to a source.

Time Warner Inc.’s 3.55% senior notes due 2024 were unchanged on the day, a market source said.

Citi tightens

Citigroup’s 3.75% notes due 2024 tightened to 112 bps offered on Friday from 126 bps offered in the previous trading session, according to a market source.

Citigroup sold $1.25 billion of the notes (Baa2/A-/A) on June 9 at a spread of Treasuries plus 115 bps.

The bank is based in New York City.

Apple improves

Apple’s 3.45% notes due 2024 (Aa1/AA+/) tightened to 78 bps offered on Friday, a source said.

The notes were quoted in the 82 bps area on Thursday.

Apple sold $2.5 billion of the bonds at a spread of Treasuries plus 77 bps on April 29.

The computer and mobile communications device company is based in Cupertino, Calif.

Time Warner unchanged

Time Warner’s 3.55% notes due 2024 (Baa2/BBB/BBB+) traded flat over the day at 121 bps offered, a source said.

Time Warner sold $600 million of the notes at Treasuries plus 135 bps on May 20.

The media and entertainment company is based in New York.

S&P reports

Standard & Poor's investment-grade composite spread remained unchanged at 147 bps on Thursday, according to a report from the ratings agency.

By rating, the 'AA', 'A' and 'BBB' spreads remained flat at 102 bps, 126 bps and 174 bps, respectively.

By industry, financial institutions, banks, industrials and telecommunications widened 1 bp to 194 bps, 168 bps, 203 bps and 247 bps, respectively. Utilities were unchanged at 152 bps.

The investment-grade composite spread is tight of its one-year moving average of 158 bps and its five-year moving average of 187 bps.

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