Primary pauses; $30 billion week ahead expected; Exelon, FedEx, Ford Motor Credit tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 9 – The investment-grade primary market took a pause to close the first full week of the new year on Friday, with players focused on the release of non-farm payrolls data.

The report showed that payrolls increased by 252,000 in December, slightly above the forecast of 240,000.

The unemployment rate fell to 5.6% from 5.8% in November.

The quiet session wrapped up a frantic week of issuance for the market, which saw more than $38 billion of paper price.

Meanwhile, investment-grade bond funds saw solid inflows for the week ending Jan. 7 of $2.972 billion.

The primary market is expected to be “very busy” again during the week ahead, with financial names predicted to make up the bulk of the week’s new issuance. Sources are calling for around $30 billion of supply.

Investment-grade corporate bonds were mixed over the day, with new issues mostly better in secondary trading as the week closed, according to market sources.

Bonds on the whole were a “little wider,” a trader said. “No great shakes. The CDX is finishing out about a point.”

The Markit CDX North American Investment Grade series 23 index eased 1 basis point to a spread of 69 bps.

Volume was “decent” at just over $10 billion during the session, a trader said.

Exelon Generation Co. LLC’s 2.95% senior notes due 2020 headed about 6 bps tighter than where the issue came on Thursday.

FedEx Corp.’s senior notes (Baa1/ BBB/) brought on Tuesday improved with a “pretty good market” seen in the offering, a trader said.

Ford Motor Credit Co. LLC’s notes (Baa3/BBB-/BBB-) priced in Tuesday’s session tightened more than 5 bps.

Arizona Public Service Co.’s 2.2% notes due 2020 sold on Wednesday were quoted 4 bps better.

Exelon tightens

Exelon Generation’s 2.95% senior notes due 2020 were seen early on Friday at 139 bps bid, a trader said.

The company sold $750 million of the notes (Baa2/ BBB/BBB+) at Treasuries plus 145 bps on Thursday.

The energy producer is a subsidiary of Chicago-based Exelon Corp.

FedEx stronger

FedEx’s 2.3% notes due 2020 traded early afternoon at 80 bps bid and earlier in the session at 76 bps offered, according to a trader.

FedEx sold $400 million of the five-year notes at a spread of Treasuries plus 85 bps on Tuesday.

The company’s tranche of 3.2% notes due 2025 headed out at 113 bps offered in the secondary market, the trader said.

FedEx priced $700 million of the notes at Treasuries plus 125 bps in Tuesday’s offering.

The shipping and logistics management company is based in Memphis.

Ford Motor Credit firms

Ford Motor Credit’s 2.145% notes due 2018, which priced in a $500 million offering on Tuesday at Treasuries plus 115 bps, tightened to 106 bps bid, 103 bps offered, a trader said on Friday.

The company’s tranche of 3.219% notes due 2022 were seen early in the day at 137 bps bid, 132 bps offered, according to the trader.

The issue priced in a $750 million offering on Tuesday at Treasuries plus 145 bps.

Ford Motor Credit is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

Arizona Public Service better

Arizona Public Service’s 2.2% notes due 2020 (A3/A-/A-) firmed to 68 bps bid on Friday, a trader said.

The company sold $250 million of the notes on Wednesday at Treasuries plus 72 bps.

The Phoenix-based electric utility is a subsidiary of Pinnacle West Capital Corp.

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