Morning Commentary: Vornado Realty returns with bond deal; AT&T, Time Warner notes soften

By Cristal Cody

Tupelo, Miss., Dec. 12 – Vornado Realty Trust announced an offering of notes due 2025 on Tuesday.

The company held fixed income investor calls on Friday after pulling the bond deal on Dec. 4 when it also priced $300 million of $25-par 5.25% split-rated series M cumulative redeemable perpetual preferred stock, a source said.

Otherwise, market activity was mostly quiet over the morning with attention focused on political situations, including the Alabama special election, sources reported.

High-grade supply is expected by market participants to be thin over the week with about $10 billion of volume forecast.

The Federal Reserve is widely expected to raise rates on Wednesday following its two-day monetary policy meeting.

In the secondary market, AT&T Inc.’s bonds (Baa1/BBB+/A-) continue to trade heavily but remained mostly weak early Tuesday, a source said.

AT&T’s 3.9% notes due Aug. 14, 2027 traded over the morning softer at 100.31 from where the notes went out at 101.75 on Monday.

The Justice Department is moving forward with a federal lawsuit it filed in November to stop the company’s $85.4 billion cash and stock acquisition of Time Warner Inc. that was scheduled to close before the end of the year. A trial date has been set for March 19, 2018.

AT&T sold $5 billion of the notes on July 27 at 99.827 to yield 3.92% and a spread of 160 basis points over Treasuries.

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) were trading with a 94 handle over the morning. The notes last traded on Monday at 97.00.

The New York-based media and entertainment company sold $800 million of the notes on May 5, 2016 at 98.70 to yield 3.1%, or a spread of Treasuries plus 135 bps.

On Monday, overall secondary market volume totaled $14.96 billion, according to Trace.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.