By Rachelle Kakouris
NEW YORK, June 25 (IFR) - British Airways and BT broke the
silence in the US bond markets on Tuesday, testing investor
appetite for risk after a global sell-off paralyzed new issuance
for four straight trading days.
Domestic high-yield issuer TransDigm also stepped forward
with a new deal, as borrowers defied talk that the new issue
freeze would hold until after the July 4 holiday due to market
UK telecoms giant BT announced a USD600m
SEC-registered three-year senior unsecured fixed note via RBS,
BNP Paribas, Citi, Deutsche and HSBC.
Meanwhile national flag-carrier British Airways came out
with a USD928.61m two-tranche deal that is being financed
through an enhanced equipment trust certificate.
Citi, HSBC, Deutsche and Morgan Stanley are the joint active
bookrunners on the trade.
Analysts said it might be a useful time for investors to buy
despite the ongoing volatility concerns that have seen US
Treasury yields spike in the past few weeks.
"This is a buying opportunity," said Zane Brown, a partner
and fixed income strategist at US investment management firm
"This is an opportunity to add to add names that we've
already well researched and weren't able to get attractive
prices a month ago."
In the high-yield space, TransDigm announced a
USD500m offering of eight-year non-call three senior
subordinated debt that will fund a special dividend for holders
of stock in the Cleveland-based aerospace components
Such shareholder-friendly deals are typically made under
more bullish conditions, and the transaction is seen as a test
of risk tolerance at a time when investors have been demanding
better returns at a time of heightened volatility.
Moody's placed TransDigm's B1 corporate family rating on
review for possible downgrade after the company said it was
considering paying a USD1.0bn to USD1.8bn special dividend.