Primary sees no new issues; issuance expected to remain modest; Allstate, Aflac trade better

By Aleesia Forni and Andrea Heisinger

New York, June 7 - Employment numbers for May were released early Friday, which ensured that no investment-grade bonds would be priced.

While the U.S. Labor Department noted that jobs were added, the unemployment rate rose to 7.6% in May from 7.5% in April.

"Yeah, not a great tone," a source said at midday. Rising Treasury yields had scared many issuers off on Wednesday and Thursday.

Nearly all of the week's roughly $15 billion of bonds were priced on Monday or Tuesday.

The coming week is expected to see the same range of issuance - $15 billion to $20 billion - that was predicted for the past week.

"[That's] pending market conditions, of course," one source said late Friday.

Another market source pegged the next week at $10 billion to $15 billion of issuance.

"We have a lot on tap, but we're not sure [of supply] due to this week's market conditions," the source said. "There will be more industrials, and we're saying more toward the $15 billion mark."

The Markit CDX Series 20 North American Investment Grade index was 3 basis points tighter on the day at a spread of 81 bps.

The high-grade secondary bond market saw the week's new deals from Allstate Corp. and Aflac Inc. trade tighter on Friday, traders said.

Allstate firms

Allstate's $500 million tranche of 3.15% 10-year notes traded 3 bps better at 96 bps bid, 92 bps offered.

The notes were priced at a spread of Treasuries plus 102 bps on Tuesday.

Meanwhile, the $500 million tranche of 4.5% 30-year bonds was quoted 1 bps tighter at 121 bps bid, 116 bps offered.

The bonds were sold at Treasuries plus 122 bps.

The holding company for insurance subsidiaries is based in Northbrook, Ill.

Aflac tighter

In another recent deal, Aflac's upsized $700 million trade of 3.625% 10-year senior notes, which priced at a spread of 150 bps over Treasuries on Monday, traded 6 bps better at 145 bps bid.

The company provides supplemental health and life insurance through its subsidiaries and is based in Columbus, Ga.

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