Fidelity National prices, moderate volume seen for week ahead; Goldman wider on Justice probe

By Andrea Heisinger and Cristal Cody

New York, April 30 - A new deal was priced by Fidelity National Financial Inc. to end the week and month of April on Friday.

The insurance holding company sold $300 million of seven-year notes after the deal went overnight from Thursday.

This ended a low-volume week in terms of the number of deals that were priced. There was more than $11 billion in deals priced, not including emerging markets.

In secondary trading, Goldman Sachs Group Inc.'s bonds moved out after news hit that the Justice Department had launched a criminal investigation over how it arranged subprime mortgage securities deals. The Securities and Exchange Commission filed fraud charges against Goldman on April 16 in regards to transactions brought in 2006 and 2007.

Other than the Goldman news, Friday marked a slower day in the secondary, sources said.

"It was thin trading," one trader said. "People are just not wanting to get really long before the weekend outside of Treasuries with the Greece situation."

Treasuries were stronger on Friday.

The yield on the 10-year benchmark Treasury note firmed 7 bps to 3.66%, and the yield on the 30-year Treasury bond also was 7 bps tighter at 4.52%.

For investment-grade corporates, overall Trace volume was down 10% to about $11.5 billion, according to a market source.

Also in trading, the CDX Series 14 North American high-grade index moved out 3 bps to a mid bid-asked spread level of 92 bps, according to a source.

Fidelity National prices seven-year notes

Fidelity National Financial priced $300 million of 6.6% seven-year senior unsecured notes (Baa3/BBB-) early in the day to yield Treasuries plus 350 bps, according to a press release and an FWP filing with the Securities and Exchange Commission.

The deal went overnight from Thursday, and was "always intended to be a two-day [sale]," a source said.

"This issuance enhances our longer-term liquidity profile and continues our strategy of conservatively managing our balance sheet and liquidity position during these uncertain times," said the company's chairman William P. Foley, II, in the release.

"The net proceeds will more than pre-fund the $165 million of debt that matures in August of 2011, extend the maturity profile of our outstanding debt and provide increased flexibility at the holding company."

Bookrunners were Bank of America Merrill Lynch and J.P. Morgan Securities.

The insurance holding company is based in Jacksonville, Fla.

Uptick in bond issuance expected

As earnings season slowly comes to an end in the next couple of weeks, issuers are expected to make their way back to the market in moderate numbers.

"We should see it pick up - I hope," a market source said at the end of Friday. "I would be nice to have deals."

Two larger syndicate desks reported "a few" offerings each in the works for the coming week. The pace is expected to be similar to the past one where Tuesday and Wednesday bear the most sales.

Companies are mostly expected to feel out the tone on Monday, with a couple of sales possible, a source said.

The week ended on a "decent note," he said, although any new headlines over the weekend could derail that.

Fidelity National firmer

In secondary trading, the lone deal from the primary saw slight activity, according to traders.

Fidelity National priced $300 million of 6.6% notes due 2017 at Treasuries plus 350 bps.

"It was basically offered without a bid around 349 bps," a source said.

The bonds were seen firmer at the start.

"Initially they were offered before pricing or right after pricing at 335 bps and then they widened out to 348 bps," a trader said.

Goldman moves out

Meanwhile, reports Friday of the new criminal probe that follows the earlier civil fraud charges filed by the SEC against Goldman weakened the New York bank's high-grade debt.

For example, Goldman's 5.375% notes due 2020 moved out to 215 bps bid, 205 bps offered, a trader said.

The 10-year notes on Thursday had firmed more than 30 bps to 167 bps.

"They've progressively gotten weaker over the day," the trader said Friday. "That's where the bulk of the action was."

Goldman's bonds had tightened the previous two days after Goldman executives were grilled before a Senate panel.

"People felt like it was overdone and now they're worried all over again," the trader said.

In fact, Goldman "was the news today," another trader said.

"All day it seemed to be trading about 15 to 20 bps wider," the trader said.

Although not much was seen trading actively elsewhere in the financial sector, bank paper was weaker, dragged down by the Goldman news, the trader said.

"It's a couple basis points here and there. It's guilty by association."

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