Ares Capital sells add-on; Goldman Sachs firms; Morgan Stanley mixed; JPMorgan soft

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 23 – Ares Capital Corp. made its way to the investment-grade bond market to close out the week on Friday.

The alternative asset management firm sold a $200 million add-on to its existing 3.875% senior notes due Jan. 15, 2020 with a spread of 250 basis points over Treasuries, an informed source said.

The notes (/BBB/BBB) sold in line with talk, which was unchanged from initial guidance.

Pricing was at 100.185 to yield 3.831%.

The bookrunners were BofA Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

Proceeds will be used to repay debt and for general corporate purposes.

The Los Angeles-based firm sold the original $400 million offering of notes with a spread of 235 bps over Treasuries on Nov. 18.

Friday’s new issuance activity pushed the investment-grade primary market’s total supply to $21.45 billion for the week, coming in just above what was expected to be around a $20 billion week.

Meanwhile, Lipper reported inflows of $1.14 billion into corporate investment-grade bond funds for the week ended June 21.

The total fell from last week’s inflows of $1.49 billion, bringing the year-to-date total inflows to $5.6 billion.

Investment-grade corporate bonds and credit spreads ended Friday modestly better, market sources said.

“Spreads are in a little bit generally,” a trader said.

The Markit CDX North American Investment Grade index firmed 1 bp to a spread of 67 bps.

Secondary trading volume on Friday hit about $13 billion, while volume on Thursday was heavy at more than $17 billion, according to a market source.

Trading was “on the quieter side” on Friday, a trader said.

Goldman Sachs Group Inc.’s senior notes (Baa1/A-/A) that priced on Tuesday “came in quite a bit” in the secondary market, a trader said.

Morgan Stanley’s senior notes (Baa2/A-/A) brought on Thursday headed out flat to stronger over the day.

JPMorgan Chase & Co.’s 3.125% notes due 2025 that priced a week ago widened about 5 bps over the past two sessions.

Goldman tightens

Goldman Sachs’ 2.6% notes due 2020 traded tighter at 123 bps bid, 117 bps offered on Friday, a trader said.

Goldman sold $1 billion of the five-year notes on Tuesday at a spread of Treasuries plus 135 bps.

The company’s tranche of 3.5% notes due 2025 that priced on Tuesday firmed to 147 bps offered, according to the trader.

“Two days ago, they were trading in the 160 bps area,” the trader said.

Goldman sold $1.7 billion of the 10-year notes at 170 bps over Treasuries.

The financial services company is based in New York City.

Morgan Stanley flat to better

Morgan Stanley’s 2.65% notes due 2020 tightened about 1 bp over the day to 119 bps bid, 116 bps offered, according to a trader.

Morgan Stanley sold $2.5 billion of the notes at Treasuries plus 130 bps on Thursday.

The company’s tranche of 4.3% notes due 2045 were flat on the day at 175 bps offered, the trader said.

Morgan Stanley sold $2.5 billion of the bonds at Treasuries plus 190 bps in Thursday’s offering.

The financial services company is based in New York City.

JPMorgan widens

JPMorgan Chase’s 3.125% notes due 2025 traded softer at 138 bps offered, a trader said.

The paper was quoted on Wednesday at 133 bps offered.

JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on Jan. 15 at a spread of Treasuries plus 145 bps.

The financial services company is based in New York City.

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