FHLBank prices $2 billion; high-grade funds post outflows; Charter notes tighten in secondary

By Cristal Cody

Tupelo, Miss., Dec. 19 – The Federal Home Loan Bank System priced $2 billion of two-year Global notes on Thursday.

Corporate supply remained quiet over the session with no high-grade corporate bonds priced week to date.

Little activity is expected in the primary market for the rest of the year, sources report.

About $1 billion to $3 billion of potential bond deal volume remains for December monthly syndicate forecasts, a source reported earlier in the week.

Corporate investment-grade funds posted outflows for the past week ended Wednesday, Lipper US Fund Flows reported.

Funds saw outflows of $180 million, compared to inflows of $4.61 billion in the previous week and $2.23 billion in the prior week.

The Markit CDX North American Investment Grade 33 index firmed modestly on Thursday to end at a spread of 45.7 basis points.

In the secondary market, Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050 that were reopened earlier in the month firmed about 6 bps.

Charter tightens

Charter Communications’ 4.8% split-rated notes due March 1, 2050 (Ba1/BBB-/BBB-) tightened about 6 bps to 216 bps bid in secondary trading on Thursday, a market source said.

The notes were quoted ending the previous week at 226 bps bid.

In price, the notes rose to 104.82 over the day after trading up at 104.53 at the start of the session. The notes headed out on Wednesday at 104.42.

Charter priced a $1.3 billion add-on to the bonds on Dec. 2 at 101.964 to yield 4.677% and a spread of Treasuries plus 240 bps.

Subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. were the issuers.

Charter originally sold the notes in a $1.5 billion offering on Oct. 15 at 99.436 to yield 4.836% and a spread of Treasuries plus 260 bps. The total outstanding is now $2.8 billion.

The broadband communications company is based in Stamford, Conn.

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