Corporate-bond deals continue to trickle in Wednesday as companies push to get deals completed before the two-day European Union summit begins Thursday.
Conditions were favorable, with the stock market rising and few headlines making their way out of Europe. A broad gauge of corporate-bond health, Markit's CDX North America Investment Grade Index, improved 0.7% in early-afternoon trading.
For home-security-products provider ADT Corp., the stable tone was encouraging enough to issue a three-part, $2.5 billion deal, while serial issuer General Electric Capital Corp., a unit of General Electric Co. (GE), is selling an undetermined amount of three-year notes.
ADT, which is being spun off by parent company Tyco International Ltd. (TYC), is offering five-, 10-, and 30-year maturities. Early price talk suggests the bonds will offer spreads to Treasurys of 1.60, 1.95, and 2.30 percentage points, respectively.
They are expected to be rated Baa2 by Moody's Investors Service, BBB by Standard & Poor's, and BBB-plus by Fitch Ratings.
Fitch noted that the company boasts nationwide brand recognition with more than six million customers, adding that its subscriber-based business generates sustainable cash flow and solid liquidity.
Among smaller deals, Liberty Interactive Corp.'s (LINTA, LINTB) multimedia retailer QVC Inc. plans to sell $500 million of 10-year senior secured notes. Markel Corp. (MKL), a property-and-casualty insurance-holding company, is selling $300 million of 10-year notes.
The day is much quieter than Tuesday, when $8.25 billion was sold.
Market participants were expecting upwards of $15 billion in new issuance this week, in part because trading could be thin next week owing to the U.S. Independence Day holiday falling on a Wednesday.
Average yields ticked up Tuesday, but at 3.29% they remain incredibly low and just 0.04 percentage point from the all-time record.
Bonds are mostly improving in secondary trading, with nine of the 10 most-active bonds outperforming Treasurys, according to MarketAxess.
Comcast Corp. (CMCSA) 10-year and 30-year bonds, which priced Tuesday, have improved 0.05 and 0.04 percentage point, respectively.
Spreads on 3M Co. (MMM) 10-year bonds that priced at a record-low 2% coupon last week tightened 0.03 percentage point Wednesday. The spread is now 0.54 point, versus 0.55 at issuance.
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(END) Dow Jones Newswires
June 27, 2012 13:25 ET (17:25 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.