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High-grade bond issuance stills with eyes on Fed; AT&T, Time Warner flat; MetLife tightens
By Cristal Cody
Eureka Springs, Ark., Dec. 14 – High-grade primary issuers stood back on Wednesday with all eyes on the Federal Reserve’s policy rate decision.
Investment-grade credit spreads, Treasuries and stocks weakened following the Federal Reserve's 25-basis-point benchmark rate hike and a surprise hawkish tone, according to market sources.
The Fed said it expects to raise rates three times in 2017.
The Markit CDX North American Investment Grade index eased about 1 bp to a spread of 68 bps.
The three-month Libor yield rose 1 bp over the day to 97 bps.
Investment-grade bonds were mostly steady over the session in secondary trading.
Bonds from Time Warner Inc. and AT&T Inc., which announced plans to acquire Time Warner in October, were generally flat on the day.
Duke Energy Corp.’s 2.65% senior notes due 2026 were unchanged in the secondary market on Wednesday.
Earlier, MetLife Global Funding I’s 3.45% notes due 2026 priced on Monday traded 5 bps better than issuance.
AT&T unchanged
AT&T’s 4.125% notes due 2026 headed out flat at 154 bps bid, according to a market source.
AT&T (Baa1/BBB+/A-) priced a $900 million add-on to the bonds on May 3 at Treasuries plus 150 bps. The notes originally were sold on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.
The telecommunications company is based in Dallas.
Time Warner flat
Time Warner’s existing 2.95% notes due 2026 were unchanged in secondary trading at 143 bps bid, a market source said.
Time Warner (Baa2/BBB/BBB+) sold $800 million of the notes on May 5 at a spread of 135 bps over Treasuries.
The media and entertainment company is based in New York.
Duke Energy stable
Duke Energy’s 2.65% notes due 2026 traded flat during the session at 106 bps bid, a market source said.
The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps plus Treasuries.
The diversified energy company is based in Charlotte, N.C.
MetLife tightens
MetLife Global Funding I’s 3.45% notes due 2026 were seen tighter earlier in the session at 92 bps offered, a market source said.
MetLife priced $1 billion of the 10-year notes (Aa3/AA-/) on Monday at a spread of 97 bps over Treasuries.
The issuer is a financing arm of New York City-based insurance and employee benefits company MetLife Inc.
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