American Airlines prices; busy December forecast; Time Warner Cable backs off weakness

By Cristal Cody

Tupelo, Miss., Nov. 27 - Activity in the investment-grade bond market slowed on Wednesday ahead of the market closure on Thursday and early close on Friday, according to informed sources.

"Volume is on the low side," one source said. "It's almost like an early close for a lot of people."

The bond markets will be closed on Thursday for the Thanksgiving Day holiday.

Some market participants will be open on Friday, but no primary activity is expected, sources said.

Issuers have brought more than $100 billion of new high-grade paper in November, and forecasts call for about $50 billion of issuance in December, according to a market source.

American Airlines, Inc. on Wednesday announced that it priced and closed on its Rule 144A and Regulation S private offering of $512,038,000 of 5.6% series 2013-2B pass-through certificates.

The certificates (/B+/B) are due July 15, 2020, according to a filing with the Securities and Exchange Commission.

The certificates represent an interest in the assets of a pass-through trust, which holds equipment notes issued by American. The equipment notes are secured by 41 currently owned Boeing 737-823 aircraft, 14 Boeing 757-223 aircraft, one Boeing 767-323ER aircraft and 19 Boeing 777-223ER aircraft.

The commercial airline, which is a subsidiary of AMR Corp., is based in Fort Worth.

In secondary market activity, Time Warner Cable Inc.'s 4% notes due 2021 firmed slightly over the day, a trader said. Time Warner Cable continues to be among the most actively traded names of the week on reports the company is a takeover target by Comcast Corp. and Charter Communications Inc.

In other trading, Advance Auto Parts, Inc.'s 4.5% notes due Dec. 1, 2023 tightened on the offered side, a trader said.

Schlumberger Investment SA's new 3.65% notes due 2023 traded about 8 basis points better from where the issue priced on Monday.

Time Warner Cable pulls back

Time Warner Cable's 4% notes due 2021 (Baa2/BBB/BBB) firmed in thin trading on Wednesday, a trader said.

The notes were quoted late in the day in the 225 bps area.

Earlier in the session, the notes were seen wider at 234 bps bid, 220 bps offered.

The New York City-based broadband communications company sold $1 billion of the notes on Sept. 7, 2011 at a spread of 210 bps over Treasuries.

Advance Auto firms

Advance Auto's 4.5% notes due Dec. 1, 2023 traded on Wednesday at 173 bps offered, a trader said.

The company (Baa3/BBB-/) sold $450 million of the 10-year notes with a spread of 180 bps plus Treasuries on Monday.

Advance Auto Parts is an automotive aftermarket parts and accessories retailer based in Roanoke, Va.

Schlumberger better

Schlumberger Investment's 3.65% senior notes due 2023 traded on Wednesday in the 87 bps bid area, a trader said.

The company (A1//) sold $1.5 billion of the 10-year notes on Monday with a spread of 95 bps plus Treasuries.

Schlumberger Investment is a subsidiary of Houston-based Schlumberger Ltd., which supplies technology, integrated project management and information solutions to customers in the oil and gas industries.

Bank/brokerage CDS costs

Investment-grade bank and brokerage CDS prices were unchanged to lower on the day, according to a market source.

Bank of America Corp.'s CDS costs firmed 1 bp to 81 bps bid, 85 bps offered. Citigroup Inc.'s CDS costs firmed 1 bp to 76 bps bid, 80 bps offered. JPMorgan Chase & Co.'s CDS costs ended unchanged at 70 bps bid, 74 bps offered. Wells Fargo & Co.'s CDS costs firmed 1 bp to 43 bps bid, 47 bps offered.

Merrill Lynch's CDS costs closed unchanged at 82 bps bid, 86 bps offered. Morgan Stanley's CDS costs firmed 1 bp to 94 bps bid, 98 bps offered. Goldman Sachs Group, Inc.'s CDS costs tightened 1 bp to 97 bps bid, 98 bps offered.

Paul Deckelman contributed to this review.

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