Supply thins; Principal Life, Municipality Finance price; Quebec on deck; Bayer tightens

By Cristal Cody

Tupelo, Miss., June 27 – Deal action thinned on Wednesday as volatility took hold and credit spreads widened.

Principal Life Global Funding II priced $300 million of two-year senior secured floating-rate notes as the sole reported corporate issuer in the high-grade primary market.

In SSA supply, Municipality Finance plc priced $1 billion of three-year notes.

Quebec also was offering Canadian dollar-denominated global notes on Wednesday that are registered with the Securities and Exchange Commission.

In other corporate deal activity, Toyota Motor Credit Corp. is marketing three tranches of SEC-registered senior notes with fixed-income investor calls that began in the United States, Europe and Asia on Tuesday, a source said.

Week to date, about $2.8 billion of high-grade corporate bonds have priced.

About $15 billion to $20 billion of supply is expected by market sources for the week.

The Markit CDX North American Investment Grade 30 index softened 2 basis points over the day to head out at a spread of 68 bps.

In the secondary market, Bayer AG’s notes tightened 4 bps to 5 bps on Wednesday.

Bank and financial paper traded mostly flat to softer, a source said.

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