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Five high-grade issuers announce deals

By Hillary Flynn

NEW YORK, July 20 (IFR) - Five high-grade deals were in the primary market on Wednesday, testing conditions that look solid for issuance.

Goldman Sachs (NYSE: GS-PB - news) is looking to raise US$650m in perpetual non-call 10-year fixed to floating rate non-cumulative bonds, that are rated Ba1/BB/BB+. The initial price thoughts on the bonds are 5.75% area.

Morgan Stanley (Xetra: 885836 - news) (A3/BBB+/A) is also in the market with a 10-year senior unsecured issue with IPTs of 180bp area.

The other deals in the market included Nationwide Building Society (Aa3/A/A) with a five-year bond at IPTs of 155bp area, OM Asset Management (NYSE: OMAM - news) (Baa2/BBB-) with a US$250m 10-year senior with IPTs between T+312.5-325bp, and Kazakhstan's Tengizchevroil Finance Company (Baa2/BBB) offering a US$1bn 10-year amortiser (average life of 9.8 years) that launched at T+250bp, 50bp tighter than at initial price thoughts.

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Market backdrop looks good for issuance with CDXIG26 about 1.2bp tighter, and an ongoing hunt for yield tightening spreads on newly issued bonds.

The average high-grade bond has tightened some 12bp in the last 10 days as of July 19, according to the Bank of America (Swiss: BAC.SW - news) Merrill Lynch Master Index.

Teva Pharmaceutical's bonds, issued on Monday, continued to tighten on Wednesday.

The company's 30-year bonds were about 3bp tighter from Tuesday or 15bp tighter than where they priced, according to MarketAxess.

The 10-year spread was at T+146bp or 14bp tighter than pricing, and the five-year at 98bp, 12bp tighter than new issue.

Teva's new seven year bonds were at T+125bp, 20bp tighter than new issue pricing.

"Activity will pick up relatively quickly come Monday next week," one banker said. (Reporting by Hillary Flynn; editing by Shankar Ramakrishnan)