First Financial prices notes amid summer slowdown; Xerox paper stronger; Hershey mixed

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 20 – First Financial Bancorp gave the investment-grade primary market its only signs of activity on Thursday during another weaker session for the market.

The Cincinnati-based bank sold a $120 million offering of 10-year subordinated notes with a spread of 303.4 basis points over Treasuries.

Thursday’s lone deal pushes the week’s total supply to $7.3 billion, falling short of what was predicted to be around $10 billion of new issuance.

Additionally, August has seen roughly $54 billion of paper come to market so far, following the staggering $155.34 billion of new investment-grade issues priced in July.

This summer slowdown comes ahead of what is predicted to be a frenzied month of issuance for September, with more than $100 billion of supply forecasted.

Credit spreads remained weak on the day after opening 2 bps wider. The Markit CDX North American Investment Grade index headed out at the widest range of the year at a spread of 81 bps.

In the secondary market, Xerox Corp.’s 3.5% notes due 2020 brought on Monday traded more than 2 points better than issuance.

Hershey Co.’s notes (A1/A) that priced on Tuesday were mixed in secondary trading.

In other trading, AT&T Inc.’s 3.4% notes due 2025 improved over the day.

First Financial subordinated notes

First Financial Bancorp priced $120 million of 5.125% 10-year subordinated notes (Kroll: BBB) on Thursday at par with a spread of Treasuries plus 303.4 bps, according to an FWP filed with the Securities and Exchange Commission.

RBC Capital Markets LLC is the bookrunner.

Proceeds will be used for general corporate purposes.

The bank holding company is based in Cincinnati.

Xerox better

The 3.5% notes due 2020 that Xerox sold at 99.113 on Monday were quoted better at 101.37 in secondary trading on Thursday, a market source said.

The notes (Baa2/BBB/BBB) were last seen trading at 99.99 on Wednesday.

Xerox sold $400 million of the notes at 99.113 to yield 3.696% with a spread of Treasuries plus 212.5 bps.

The maker of office equipment is based in Norwalk, Conn.

Hershey mixed

Hershey’s new 1.6% notes due 2018 traded lower at 97.46 on Thursday, down from 100.58 on Wednesday, a market source said.

The company sold $300 million of the notes at 99.974 to yield 1.609% with a spread of Treasuries plus 55 bps on Tuesday.

Hershey’s tranche of 3.2% notes due 2025 was quoted better at 100.95 on Thursday, up from 100.22 in the previous session.

Hershey sold $300 million of the 10-year notes at 99.703 to yield 3.235% with a spread of 105 bps over Treasuries in the offering on Tuesday.

The chocolate, candy and confectionary product maker is based in Hershey, Pa.

AT&T rises

AT&T’s 3.4% notes due 2025 rose to 95.14 going out on Thursday, better than where the bonds last traded at 94.88 in the previous session, a market source said.

The notes (/BBB+/A-) were seen 3 bps weaker earlier in the day at 191 bps offered.

AT&T sold $5 billion of the notes on April 23 at 99.704 with a spread of Treasuries plus 150 bps.

The telecommunications company is based in Dallas.

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