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By Danielle Robinson
NEW YORK, March 30 (IFR) - Australian telecom giant Telstrawas the only issuer Monday, coming with a US$1bn offering of10-year securities as the high-grade market got theholiday-shortened week off to a slow start.
Telstra's strong A2/A rating, and the fact that it hasn'tbeen in the market in four years, helped bookrunners Barclays,Citigroup and JP Morgan launch the deal some 15bp tighter thanwhere Verizon and AT&T trade.
The deal launched at 118bp, 17-22bp tighter than initialprice thoughts of 135bp-140bp. This compared with a G spread ofaround 133bp on both AT&T's 3.9% March 2024s (A3/A-/A) andVerizon's 3.5% November 2024s (Baa1/BBB+/A).
The trade is set to price competitively to Vodafone(A3/A-/A-), which had 2.95% February 2023s - two years shorterin maturity - at around G+113bp early this morning, according tolevels supplied by MarketAxess.
Syndicate desks are not expecting much more thanUS$10-US$15bn this week, as investors look to digest the recordonslaught of supply.
"To be a little slow is not a bad thing," one syndicatemanager told IFR. "The market could benefit from this."
Some bankers are advising borrowers to hold off for a weekif they can.
"You could get something done if you had to, but I am notpounding the table saying there's a great window of opportunityhere," said the syndicate manager.
Telstra's deal takes March's tally to US$149bn, the biggestmonth - and quarter - of investment-grade issuance ever with oneday still to go. (Reporting By Danielle Robinson; Editing by ShankarRamakrishnan and Marc Carnegie)
