Tone improves on strong payrolls; Bayer, Enterprise bonds continue tightening in secondary

By Aleesia Forni

Virginia Beach, Oct. 3 – The high-grade bond market was unsurprisingly quiet on Friday, with the market’s focus firmly set on the release of September’s payrolls data.

The Labor Department reported that the U.S. economy added 248,000 jobs during September, compared to expectations of 215,000 jobs.

The unemployment rate fell to 5.9%.

The market’s tone was decidedly more positive on Friday following the strong jobs report, closing a volatile week for high-grade bonds.

In the secondary market, spreads continued to trade tighter following the weakness seen earlier during the week.

The Markit CDX North American Investment Grade series 22 index was 1 basis point tighter at a spread of 62 bps.

Recent deals from both Bayer US Finance LLC’s and Enterprise Products Operating LLC traded better during Friday’s session.

Bayer’s new $7 billion of senior notes continued to trade better during the session on Friday, a market source said.

The company’s recently priced $2 billion of 2.375% five-year notes traded 4 bps tighter on the day at 70 bps bid, 66 bps offered.

The notes sold with a spread of Treasuries plus 80 bps on Wednesday.

In other secondary action, Enterprise’s $2.75 billion of senior notes (Baa1/BBB+/), which sold in four parts on Thursday, also firmed on Friday.

The new $800 million of 2.55% five-year notes traded 4 bps better on the day at 79 bps bid after pricing with a spread of Treasuries plus 85 bps.

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