T-Mobile deal on horizon; high-grade fixed income fund flows soften; telecom bonds widen

By Cristal Cody

Tupelo, Miss., Jan. 3 – Investment-grade supply remained quiet on Friday with deal volume expected to likely resume in the first full week of 2020.

Merger and acquisition deals are in the forefront with investors particularly awaiting the outcome of regulatory approval of T-Mobile U.S. Inc.’s acquisition of Sprint Corp.

A potential investment-grade senior secured bond offering from T-Mobile to fund the acquisition is forecasted in the $19 billion area based on the company’s senior bridge financing, a market source said.

Other deals in the foreseeable horizon that may be in the high-grade pipeline include Novartis International AG, which announced in November that it will acquire The Medicines Co. in a transaction set to close in the first quarter of 2020. The deal is valued at $7.4 billion.

Meanwhile, investment-grade inflows softened over the past holiday-shortened week.

In secondary trading on Friday, investment-grade bonds were mixed, including Steel Dynamics, Inc.’s 3.45% notes due April 15, 2030, AT&T Inc.’s 4.35% notes due March 1, 2029, Verizon Communications Inc.’s 3.875% green senior notes due Feb. 8, 2029 and Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050.

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