Midday Commentary: Carnival bonds trade tighter; secondary mostly unmoved by jobs data

By Andrea Heisinger

New York, Feb. 1 - Issuers shied away from the investment-grade bond market as of midday on Friday following the release of unemployment numbers for January by the Labor Department.

The unemployment rate stayed relatively steady with more jobs added but no real drop in the 7.9% unemployment rate.

In the secondary market, there was little change on the jobs data, a trader said.

"It was a little better," he said. "Treasuries and stocks are up. It mostly didn't make as much of a jump in bonds as it did in those other markets."

Recent deals like the $500 million of 1.2% notes due 2016 priced Thursday by Carnival Corp. were seen contracting in the secondary.

A trader said that the Carnival notes were seen late Thursday at a bid of 70 basis points over Treasuries after pricing at Treasuries plus 80 bps earlier that afternoon. By Friday midday the notes were seen trading in the low-to-mid 70 bps, the source said.

There was no trading seen in Air Products and Chemicals Inc.'s $400 million of 2.75% bonds due 2023 that priced on Wednesday, traders said.

Citi gives floater terms

Citigroup Inc. gave terms of its $500 million sale of floating-rate notes due in 2017 (Baa2/A-/A), which priced at par to yield Libor plus 105 bps, according to an FWP filing with the Securities and Exchange Commission.

The sale was done on Thursday.

Citigroup Global Markets Inc. was the bookrunner.

The financial services company is based in New York City.

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