FHLBank postpones supply; market activity thins; Duke Energy, Time Warner firm; AT&T eases

By Cristal Cody

Eureka Springs, Ark., Dec. 21 – Activity in the investment-grade bond market continues to thin as the year winds to a close.

The Federal Home Loan Bank System announced on Wednesday that it will not issue a new Global Note or reopen an existing issue until 2017.

The bond markets will close early on Friday and will be closed on Monday for the Christmas holiday.

The Markit CDX North American Investment Grade index firmed about 1 basis point on Wednesday to a spread of 66 bps.

While the primary market has come to a stop, secondary trading remains active.

Duke Energy Corp.’s 2.65% senior notes due 2026 firmed about 1 bp over the day.

AT&T Inc.’s 4.125% notes due 2026 softened 3 bps in the secondary market.

Time Warner Inc.’s 2.95% notes due 2026 traded 1 bp better during the session.

AT&T announced plans in October to acquire Time Warner in an $85.4 billion cash-and-stock deal.

UnitedHealth Group Inc.’s notes (A3/A+/A-) that priced on Dec. 15 traded modestly better over the day with the long bonds stronger going out.

FHLBank skips deal

The Federal Home Loan Bank System announced on Wednesday that it will not issue a Global Note or reopen an existing issue on its scheduled Dec. 21 calendar date.

The next opportunity to issue a Global Note will be on Jan. 19, according to the news release.

On the predetermined dates, FHLBank has the option of issuing a new Global Note, reopening an existing issue or deferring until the next scheduled opportunity.

FHLBank System is a Washington, D.C.-based government-sponsored enterprise that provides member financial institutions funding support for mortgage lending and community investment.

Duke Energy firms

Duke Energy’s 2.65% notes due 2026 firmed 1 bp on Wednesday to 102 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.

AT&T eases

AT&T’s 4.125% notes due 2026 eased 3 bps over the session to 159 bps bid, according to a market source.

AT&T (Baa1/BBB+/A-) priced a $900 million add-on to the bonds on May 3, 2016 at Treasuries plus 150 bps. The notes originally were sold on Jan. 29, 2016 in a $1.5 billion offering at 195 bps over Treasuries.

The telecommunications company is based in Dallas.

Time Warner better

Time Warner’s existing 2.95% notes due 2026 traded 1 bp better over the day to 140 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.

UnitedHealth improves

UnitedHealth Group’s 3.45% notes due 2027 headed out at 100.50 on Wednesday from 100.48 the previous session, according to a market source.

The company sold $750 million of the 10-year notes at 99.896 to yield 3.462% and a spread of 85 bps over Treasuries on Dec. 15.

UnitedHealth’s 4.2% notes due 2047 climbed to 100.35 over the day from where the bonds last traded on Tuesday at 99.83.

The bonds were sold in a $750 million tranche in the Dec. 15 offering at 99.253 to yield 4.244%, or a spread of Treasuries plus 105 bps.

The diversified health company is based in Minnetonka, Minn.

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