Morning Commentary: High-grade issuers fill deal pipeline; Ford, Tyco to price; AT&T mixed

By Cristal Cody

Tupelo, Miss., July 31 – Monday’s high-grade deal pipeline filled quickly with a flurry of bond offering announcements.

At least seven high-grade issuers are marketing notes.

Ford Motor Credit Co. LLC, International Paper Co., ERP Operating LP, American Airlines, Inc., DTE Electric Co., Tyco Electronics Group SA and Hubbell Inc. all plan to tap the primary market.

In addition, KfW intends to price $1 billion of four-year senior notes on Tuesday, a market source said.

About $25 billion of deal volume is expected by market participants over the week.

In the secondary market, AT&T Inc.’s $22.5 billion of notes (Baa1/BBB+/A-) that priced in seven tranches on Thursday were active but mixed in early trading.

AT&T’s 3.4% notes due Aug. 14, 2024 traded up to 101.68 from 100.22 on Friday, according to a market source.

The $3 billion tranche priced on Thursday at 99.832 to yield 3.43%, or Treasuries plus 130 basis points.

The company’s 3.9% notes due Aug. 14, 2027 softened to 100.16 on Monday from 102.31 on Friday, the market source said.

AT&T sold $5 billion of the notes at 99.827 to yield 3.92% and a spread of 160 bps over Treasuries.

The telecommunications company is based in Dallas.

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