US high-grade supply to top US$50bn for week

By Natalie Harrison

NEW YORK, March 12 (IFR) - The US high-grade market wasfiring on all cylinders Thursday with eight deals due to pricefor more than US$14bn total, which would make this thethird-largest issuance week on record.

Following the second-biggest week ever just last week, theprimary is on track for more than US$52.6bn this week - with asurprising show of resilience despite the onslaught of supply.

"There are some signs of fatigue, but that's not surprisingas we've seen almost a month's worth of business in seven days,"one banker told IFR.

"The market is in good shape. And a day like today, whenequities are up, helps."

While retail sales disappointed today, US stocks were up 1%by mid-afternoon. And 10-year Treasuries continue to rally withyields falling back to 2.08% from a year-high of 2.25% Friday.

Borrowers were of course mindful of getting in before theFed meeting next week, with an eye on potential volatility astalk heats up of a looming rates rise.

There were several more Yankee trades today as borrowerstake advantage of the attractive currency swap.

Lloyds Bank came with a US$2.5bn three-parter, BP CapitalMarkets brought a US$2bn two-part issue and Hutchison PortHoldings Trust Finance Ltd came with a US$1bn two-part deal.

Other issues included a US$1bn issue for oil & gas firm EOGResources and an upsized US$500m issue for oil and gas drillerHelmerich & Payne. Proceeds are for capex.

The biggest deal of the day came from food giant JM Smucker,which launched a US$3.65bn issue in maturities from three to 30years to refinance a bridge loan backing its acquisition of BigHeart Pet Brands.

Bookrunners Bank of America Merrill Lynch and JP Morganbrought in levels 20-25bp from IPTs to launch.

Bank of America Merrill Lynch and Morgan Stanley also camewith self-led deals just a day after the Fed approved capitalplans of all 24 US-domiciled banks.

"(The stress test) was a gating item that had kept banks outof the market, but we should see more issuance now it is out ofthe way," the banker said. (Reporting by Natalie Harrison; Editing by Marc Carnegie)