Issuance tops $20 billion; week ahead similar; Assured Guaranty notes tighten; Verizon active

By Cristal Cody and Aleesia Forni

Virginia Beach, June 20 – The week’s issuance fell at the high end of expectations, although Friday’s session saw no new deals come to the primary.

Even with a muted session on Wednesday as the market focused on the Federal Reserve’s Federal Open Market Committee meeting, roughly $20 billion of new issuance priced this week.

This figure brings the month’s total to more than $75 billion, already topping expectations of a $70 billion month.

Demand for new deals remains solid even with the rapid pace of issuance, sources said.

Details of Thursday’s sales from Intesa Sanpaolo SpA and Societe Generale SA were released on Friday, with both attracting solid orderbooks.

Intesa Sanpaolo’s deal was more than four times oversubscribed, while Societe Generale attracted an orderbook of more than $13 billion.

In other news this week, Lipper reported inflows of $1.965 billion into corporate investment-grade funds for the week ended May 21, up significantly from last week’s outflows of $650 million.

For the week ahead, around $20 billion of investment-grade paper is expected to price for the final full week of June.

Bonds headed out marginally weaker in late afternoon trading on Friday, according to market sources.

The Markit CDX North American Investment Grade series 22 index was seen less than 1 basis point wider at a spread of 56 bps.

“Stocks aren’t doing much of anything, and spreads, if off, are just off by a little bit,” a market source said. “Yesterday and today were pretty quiet.”

Investment-grade volume was about $7 billion as the day ended, a source said.

In the secondary market, Assured Guaranty US Holdings Inc.’s 5% senior notes due 2024 “came in nicely,” a trader said.

The notes firmed about 1 bp on the day and are more than 30 bps tighter from where the issue priced on Tuesday.

Verizon Communications Inc.’s 4.15% senior notes due 2024 are among the most active issues, a trader said.

“There’s definitely a lot of volume,” the trader said. “The 10-year had the most volume on it.”

Target Corp.’s new senior notes (A2/A/A-) headed out on Friday slightly better, a trader said.

Intesa oversubscribed

The orderbook for the recent $2 billion sale from Intesa Sanpaolo reached more than $6 billion, a market source said.

The company priced the 5.017% tier 2 subordinated notes (Ba1/BBB-/BBB) due 2024 at par to yield Treasuries plus 240 bps on Thursday.

The notes sold at the tight end of talk.

Banca IMI, Barclays, Goldman Sachs & Co., Morgan Stanley & Co. LLC, Wells Fargo Securities LLC and J.P. Morgan Securities LLC were the joint bookrunners.

The financial services company is based in Turin, Italy.

Societe Generale gives details

Societe Generale detailed its recent $1.5 billion sale of 6% perpetual tier 1 subordinated notes on Friday.

The notes (Ba3//BB) priced at the tight end of talk in a Rule 144A and Regulation S sale on Thursday, according to an informed source.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley, UBS Securities LLC and Societe Generale were the bookrunners.

The financial services company is based in Paris.

Assured Guaranty tighter

Assured Guaranty’s 5% notes due 2024 (Baa2/A/) were offered over the morning on Friday at 207 bps, a trader said.

The company sold $500 million of the notes on Tuesday at Treasuries plus 237.5 bps.

The Hamilton, Bermuda-based company is the U.S. holding company for Assured Guaranty Ltd., which insures and reinsures municipal bonds, international infrastructure transactions and structured financings.

Verizon active

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) traded in the 105 bps offered area on Friday following heavier activity this week, a trader said.

“It’s been in that range for a couple of days,” the trader said.

Verizon sold $1.25 billion of the 10-year notes on March 10 at 140 bps plus Treasuries.

The telecommunications company is based in New York City.

Target firms

Target’s 2.3% notes due 2019 were quoted on Friday at 53 bps bid, 49 bps offered in light odd lot trading, according to a trader.

Target priced $1 billion of the five-year notes on Tuesday at Treasuries plus 60 bps.

The company’s 3.5% notes due 2024 were offered early Friday at 78 bps in heavier activity, the trader said.

Target sold $1 billion of the 10-year notes at Treasuries plus 90 bps.

The merchandise chain is based in Minneapolis.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.’s CDS costs eased 1 bp to 59 bps bid, 62 bps offered. Citigroup Inc.’s CDS costs rose 1 bp to 59 bps bid, 62 bps offered. JPMorgan Chase & Co.’s CDS costs were flat at 47 bps bid, 50 bps offered. Wells Fargo & Co.’s CDS costs eased 1 bp to 37 bps bid, 40 bps offered.

Merrill Lynch’s CDS costs widened 1 bp to 62 bps bid, 65 bps offered. Morgan Stanley’s CDS costs eased 1 bp to 59 bps bid, 62 bps offered. Goldman Sachs Group, Inc.’s CDS costs rose 1 bp to 64 bps bid, 67 bps offered.

Paul Deckelman contributed to this review.

© 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.