Bloomberg News

Bond Sales in U.S. Make Best Weekly Start in Two Months

June 11, 2012

AT&T Inc. (T:US), the largest U.S. phone company, and Symantec Corp. (SYMC:US) led $6.9 billion of U.S. corporate bond offerings in the strongest start to a week in more than two months.

AT&T sold $2 billion of notes and Mountain View, California-based software maker Symantec issued $1 billion of debt, marking the best opening to a week since April 2, according to data compiled by Bloomberg. Sales totaled $16.3 billion in the five days ended June 8, a 7 percent increase from the prior period, while below this year’s average of $28.3 billion for the fourth straight week.

Issuance picked up after Spain asked euro-region governments over the weekend for as much as 100 billion euros ($125 billion) to help shore up its banking system, as Europe’s crisis threatens to infect corporate balance sheets globally. The bailout may not be enough to stem Europe’s fiscal turmoil with Greece holding elections on June 17 on austerity measures.

“There are these windows of opportunity that companies are seizing,” Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia, said in a telephone interview. “Today, investor fears are lower than, say, a week ago.”

Symantec, the world’s biggest seller of security software, sold $600 million of 2.75 percent, five-year notes at a relative yield of 210 basis points more than benchmarks and $400 million of 3.95 percent, 10-year bonds at a spread of 245 basis points, Bloomberg data show. Proceeds will be used to repay the company’s $1 billion of 1 percent notes due June 2013, according to a person familiar with the transaction.

CBS Sale

CBS Corp. (CBS:US), the broadcaster and owner of the Showtime cable channel, sold $900 million in a two-part offering of five- and 30-year bonds to repay debt maturing in August.

The company sold $400 million of 1.95 percent, five-year notes to yield 150 basis points more than similar-maturity Treasuries and $500 million of 4.85 percent, 30-year debt at 230 basis points, Bloomberg data show. Both spreads are lower than initial talk of about 175 and 240 more than Treasuries, according to a person familiar with the transaction who asked to not be identified because the terms are private.

AT&T sold $1.15 billion of 1.7 percent, five-year bonds to yield 105 basis points more than similar-maturity Treasuries and $850 million of 3 percent, 10-year debt, a reopening, with a 135 basis-point spread, Bloomberg data show.

Lowest Coupons

The wireless carrier issued $1 billion of 1.6 percent five- year notes and an equivalent amount of 3 percent 10-year bonds on Feb. 8, its lowest coupons for those maturities on record, Bloomberg data show.

“We expect demand for the new bonds will be strong, as telecom is often viewed as a relatively stable place to invest,” Michael Hodel, a credit analyst at Chicago-based Morningstar Inc., wrote in a research note today.

Newell Rubbermaid Inc., the maker of Sharpie pens and Graco car strollers, sold $250 million each of 2 percent, three-year securities at a spread of 175 basis points and 4 percent, 10- year debentures at 245 basis points, Bloomberg data show.

Other issuers in the market included NiSource Finance Corp. which sold $750 million of bonds and New York Life Insurance Co which issued $500 million of debt, Bloomberg data show.

To contact the reporters on this story: Sarika Gangar in New York at sgangar@bloomberg.net; Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net;


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Companies Mentioned

  • T
    (AT&T Inc)
    • $35.54 USD
    • 0.04
    • 0.11%
  • SYMC
    (Symantec Corp)
    • $23.83 USD
    • -0.04
    • -0.17%
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