Primary market halts for payrolls data; Morgan Stanley, Citigroup soft; Time Warner widens

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 7 – The investment-grade bond market was quiet to close the week on Friday, with participants focused on the all-important payrolls data for clues regarding a possible interest rate increase in September.

The Labor Department said that the American economy added 215,000 jobs during July. The total fell short of forecasts of 223,000.

The unemployment rate held steady at 5.3%.

In total, $21.6 billion of new investment-grade bond issuance sold to open the first week of August, falling short of what was predicted to be around $25 billion to $30 billion of supply.

Meantime, Lipper reported outflows of $740 million from corporate investment-grade funds this week, bringing the year-to-date inflows to $28.1 billion.

This follows last week’s outflows of $1.26 billion.

Looking forward, sources are expecting mostly smaller-sized deals to make up what is predicted to be around a $25 billion week.

Investment-grade bonds were seen mostly flat to softer over the session and credit spreads remained weak.

Barclays plc’s 2.875% notes due 2020 were unchanged.

Morgan Stanley’s 2.65% notes due 2020 eased 5 bps in the secondary market.

Citigroup Inc.’s 3.3% senior notes due 2025 headed out 4 bps weaker in trading.

Time Warner Inc.’s 3.6% notes due 2025 continued to widen over the day.

The Markit CDX North American Investment Grade index ended 1 bp weaker at a spread of 75 bps.

Barclays flat

Barclays’ 2.875% notes due 2020 were unchanged at 135 bps bid, according to a market source.

Barclays sold $1 billion of the notes (Baa3/BBB/A) on June 1 at Treasuries plus 142 bps.

The financial services company is based in London.

Morgan Stanley soft

Morgan Stanley’s 2.65% notes due 2020 eased 5 bps in secondary trading to 109 bps bid, according to a market source.

Morgan Stanley sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 22, 2015 at 130 bps over Treasuries.

The financial services company is based in New York City.

Citigroup eases

Citigroup’s 3.3% senior notes due 2025 headed out softer at 153 bps bid on Friday, about 4 bps weaker on the day, a market source said.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at a spread of Treasuries plus 135 bps.

The investment bank is based in New York.

Time Warner weakens

Time Warner’s 3.6% notes due 2025 were seen late afternoon weaker at 194 bps bid in secondary trading, a market source said.

The notes were quoted 8 bps wider at 186 bps offered over the morning.

The notes were seen trading in the 178 bps-179 bps area on Thursday.

The company sold $1.5 billion of the notes (Baa2/BBB) on May 28 at Treasuries plus 150 bps.

Time Warner’s 4.85% debentures due 2045 widened to 222 bps bid on Friday from 207 bps bid in Thursday’s session, the source said.

The company sold $600 million of the debentures in the May 28 deal at Treasuries plus 195 bps.

Time Warner is a media company based in New York.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.