Fannie Mae issues notes; Quebec sets price talk; Bank of America, Morgan Stanley tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 27 – Fannie Mae entered the investment-grade bond primary market on Thursday with a $3 billion new issue as the market’s tone continued to improve.

The government-backed mortgage lender sold the issue in line with price talk.

Also on Thursday, the Province of Quebec announced price talk for a $250 million offering of three-year floaters.

Primary activity has been light to close out August, with only a reported $3.85 billion of supply coming to market this week.

The Canadian primary markets have been quiet over the past week.

“It would take a brave issuer to get something done,” one source said.

Credit spreads firmed 3 basis points to 4 bps over the session.

The Markit CDX North American Investment Grade index was seen late afternoon 3 bps tighter at a spread of 80 bps.

In the secondary market, Bank of America Corp.’s 3.875% senior notes due 2025 tightened more than 10 bps on Thursday.

Morgan Stanley’s 4% senior notes due 2025 traded 10 bps tighter over the day.

Barclays plc’s 5.25% senior notes due 2045 recovered some losses to trade wrapped around issuance.

Lloyds Bank plc’s 2.7% senior notes due 2020 firmed 8 bps.

JPMorgan Chase & Co.’s 3.9% senior holding company notes due 2025 were unchanged in secondary trading.

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