Supply thins; investors want yield, ‘but there is none’; Crown Castle, Progressive improve

By Cristal Cody

Eureka Springs, Ark., Aug. 26 – Investment-grade primary and secondary market activity on Friday stayed mostly quiet.

“It’s really been quiet in corporates,” one source said. “Everything’s so tight, it’s hard getting anything done. Everyone wants yield, but there is none.”

Primary action is expected to stay light through the remainder of the month with supply forecast at more than $100 billion in September, according to market sources.

“In September, the new issue market comes back to life; things will pick up again there,” the source said. “Not much happening this week or next week for corporates.”

Crown Castle International Corp.’s 2.25% senior notes due 2021 traded about 7 basis points better than where the notes priced.

Progressive Corp.’s new 2.45% senior notes due 2027 traded about 2 bps better than issuance.

Old Republic International Corp.’s 3.875% senior notes due 2026 priced on Tuesday softened but continued to trade on Friday about 15 bps tighter than issuance.

Earlier in the day, Bank of Montreal’s 1.9% senior medium-term notes due 2021 priced on Wednesday were quoted about 3 bps tighter than issuance.

Societe Generale SA’s 4.25% notes due 2026 remain strong in the secondary market, trading more than 20 bps better than pricing.

The Markit CDX North American Investment Grade index was mostly unchanged on the day at a spread of 72 bps.

Crown Castle improves

Crown Castle International’s 2.25% notes due 2021 traded at 105 bps offered in secondary trading on Friday afternoon, according to a trader.

The company sold $700 million of the notes (Baa3/BBB-/BBB-) on Aug. 22 at a spread of 112 bps over Treasuries.

Houston, Texas-based Crown Castle provides shared wireless infrastructure to wireless carriers.

Progressive better

Progressive’s 2.45% notes due 2027 traded late afternoon at 90 bps offered, a trader said.

The company priced $500 million of the notes (A2/A/A/) on Aug. 22 at a spread of 92 bps over Treasuries.

Progressive is an insurance company based in Mayfield Village, Ohio.

Old Republic eases

Old Republic International’s 3.875% senior notes due 2026 traded going out on Friday at 220 bps offered, a trader said.

The notes were seen early Thursday at 208 bps offered.

Old Republic International sold $550 million of the notes (Baa3/BBB+/) on Tuesday at Treasuries plus 235 bps.

Chicago-based Old Republic is an insurance holding company.

Bank of Montreal improves

Bank of Montreal’s 1.9% notes due 2021 were quoted about 3 bps tighter than issuance at 77 bps offered early on Friday, according to a market source.

Bank of Montreal sold $2 billion of the five-year notes (Aa3/A+/AA-) on Wednesday at a spread of Treasuries plus 80 bps.

The financial services company is based in Toronto.

Societe Generale strong

Societe Generale’s 4.25% notes due 2026 were seen in the secondary market early Friday at 253 bps offered, according to a market source.

The company sold $1 billion of the notes (Baa3/BBB/A) on Aug. 16 at a spread of 275 bps over Treasuries.

Societe Generale is a Paris-based banking and financial services company.

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