July kicks off as slowest deal week of year; Sumitomo Mitsui, Bank of Australia notes firm

By Cristal Cody

Tupelo, Miss., July 7 – The high-grade bond markets stayed quiet on Friday following the only bond supply of the week in the previous session.

Investment-grade corporate and supranational, sovereign and agency (SSA) bond issuance has been thin in June and the first week of July marked the slowest supply week year to date, a market source said.

Three issuers tapped the primary market on Thursday, while high-grade issuers declined to price bonds during the short market session on Monday and on Wednesday following the Independence Day holiday.

Primary action is expected to pick up in July with several bond offerings in the deal pipeline, a source said.

SMBC Aviation Capital Ltd. (/BBB+/A-) plans to hold fixed-income investor calls on Monday and Tuesday ahead of a possible deal.

Additional bank and financial paper issuance is expected later in the month after the major banks exit second quarter earnings blackout periods, according to market sources.

About $15 billion to $20 billion of investment-grade supply is forecast for the week ahead, according to a syndicate source.

New issues priced traded better in the secondary market on Friday.

Sumitomo Mitsui Financial Group Inc.’s $4.25 billion of senior notes (A1/A-/A) priced in three parts firmed about 1 basis point to 2 bps.

Commonwealth Bank of Australia’s $1.5 billion offering of 3.9% notes due July 12, 2047 firmed about 1.5 bps in secondary trading.

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