ANZ Banking, Vornado Realty tap investment-grade bond market; AT&T, Time Warner notes flat

By Cristal Cody

Tupelo, Miss., Dec. 12 – Australia and New Zealand Banking Group, Ltd. tapped the investment-grade primary market on Tuesday with $650 million of two-year notes in fixed- and floating-rate tranches.

Also, Vornado Realty LP priced $450 million of seven-year notes.

Market action is expected to stay light over the week with about $10 billion of total supply forecast. On Wednesday, market participants widely anticipate a rate hike by the Federal Reserve following a two-day monetary policy meeting.

The Markit CDX North American Investment Grade 29 index was mostly unchanged on the day at a spread of 50 basis points.

In the secondary market, AT&T Inc.’s bonds (Baa1/BBB+/A-) headed out mostly flat.

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. The deal was scheduled to close before the end of the year. A trial date has been set for March 19, 2018.

Time Warner’s notes (Baa2/BBB/BBB+) were mostly unchanged in secondary trading.

ANZ prices two tranches

Australia and New Zealand Banking Group priced $650 million of two-year notes (Aa3/AA-/AA-) in two parts on Tuesday, according to a market source.

The company sold $250 million of notes due Dec. 19, 2019 at Libor plus 25 bps.

The bank priced $400 million of 2.25% two-year notes at a spread of 45 bps over Treasuries.

ANZ Securities Inc., BofA Merrill Lynch and Citigroup Global Markets Inc. were the lead managers.

The financial services company is based in Melbourne.

Vornado sells $450 million

Vornado Realty priced $450 million of 3.5% seven-year notes (Baa2/BBB/BBB) on Tuesday at 99.596 to yield 3.565%, or a spread of Treasuries plus 125 bps, according to an FWP filed with the Securities and Exchange Commission.

Citigroup Global Markets, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Jefferies & Co., Barclays, BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, Credit Agricole Securities (USA) Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, SG Americas Securities, LLC, TD Securities (USA) LLC, U.S. Bancorp Investments, Inc., BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC were the bookrunners.

Proceeds will be used with cash on hand to redeem all of the company’s $450 million of 2.5% senior notes due 2019.

Vornado is a real estate investment trust based in New York.

AT&T unchanged

AT&T’s 3.9% notes due Aug. 14, 2027 were flat in the secondary market on Tuesday at 152 bps bid, a market source said.

AT&T sold $5 billion of the notes on July 27 at a spread of 160 bps over Treasuries.

The telecommunications company is based in Dallas.

Time Warner steady

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) headed out mostly unchanged at 132 bps bid, according to a market source.

The company sold $800 million of the notes on May 5, 2016 at a spread of Treasuries plus 135 bps.

Time Warner is a New York-based media and entertainment company.

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