Light supply eyed for February kickoff; credit spreads widen; new issues mixed

By Cristal Cody

Tupelo, Miss., Jan. 31 – The investment-grade primary market stayed quiet over Friday’s session as global focus turned to the United Kingdom’s official exit from the European Union, capping a week of more than $10 billion of bond volume.

Supply fell short of initial market forecasts of about $20 billion to $25 billion of issuance for the week.

Overall January volume was strong with investment-grade supply of $127.38 billion from 132 issues, near the $130.98 billion of issuance from 126 issues in the same period last year, according to Prospect News data.

Deal volume is expected to remain light in the week ahead with about $15 billion to $20 billion of supply eyed by syndicate sources.

February volume is forecast to total about $90 billion to $100 billion for the month.

The Markit CDX North American Investment Grade 33 index widened more than 3 basis points to close Friday at a spread of 50.6 bps.

In the secondary market, new investment-grade issues were mixed during the session.

Union Pacific Corp.’s $3 billion four-tranche offering of senior notes (Baa1/A-/) that led the week’s deal volume traded flat to about 7 bps wider.

Credit Suisse AG, New York Branch’s $2 billion of floating-rate senior notes due Feb. 4, 2022 priced in the previous session was wrapped around issuance.

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