Deals Are Scarce for Friday, But Next Week Could Be Busy
March 31, 2011
Dayton Hudson is expected to sell $200 million of 10-year noncallable debt through Merrill Lynch & Co., syndicate officials said. The issue is rated Baa1 by Moody's Investors Service and triple-B-plus by Standard & Poor's Ratings Group. Noncallable debt cannot be redeemed by the issuer during the specified period of time. Midland Bank, meanwhile, is planning to sell $150 million of noncumulative perpetual preferred stock through Smith Barney Inc.. The six million shares will be priced at $25 each. Price talk for the issue, which is rated single-A2 by Moody's and single-A-minus by S&P, is for a dividend yield around 9 5/8%, syndicate officials said. In addition, syndicate officials noted that ``quite a few'' issuers are mulling sales of new debt for next week, encouraged by strength in Treasurys. Pittsburgh's Equitable Resources is planning to sell $100 million to $150 million of 30-year debt through J.P. Morgan Securities Inc. next week. The issue is rated single-A2 by Moody's and single-A by S&P. The Republic of Indonesia is also said to be preparing between $300 and $400 million of 10-year Yankee debt through Salomon Brothers for sale as early as next week. The issue is rated Baa3 by Moody's and triple-B by S&P. Selling in the high-grade airline sector has sent yield spreads 0.05 percentage point wider over the past two days, traders said. The yield spread is the difference in the yield of a given debt instrument and that of a similar-term Treasury issue, with a widening of the spread suggesting an increased perception of risk. Spreads of American Airlines' 9 3/4% debt due 2021 were trading hands at 1.27 percentage points above Treasurys, Delta Air Lines' 9 3/4% debentures due 2021 were quoted at 1.43 percentage points above Treasurys and United Air Lines' 9 3/4% debentures due 2021 were quoted at 1.50 percentage points above Treasurys. American Airlines and United Air Lines are subsidiaries of AMR Corp. and UAL Corp., respectively. Otherwise, investment-grade spreads were unchanged. Prices of Antarctica Airlines' 12% senior notes due 2013 were unchanged to 1/2 point lower at 97 1/2. Junk bond prices were choppy and down as much as 1/4 in some sectors. Intermedia Capital Partners sold $292 million of 10-year Rule 144a senior notes at par to yield 11.25% late Thursday. The issue, which is rated single-B2 by Moody's and single-B by S&P, was be sold through NationsBanc. Issuers of Rule 144a deals sell them privately on the primary market, but have the right to register them as public issues six months later. Intermedia is a cable-television operator 49% owned by Tele-Communications, of Englewood, Colo.
VastPress 2011 Vastopolis
