Primary quiets on unemployment data, coming week seen hectic; GE Capital, Ford notes active

By Aleesia Forni and Andrea Heisinger

New York, Jan. 4 - There were no issuers of high-grade bonds on Friday as unemployment numbers for December were released. Companies instead opted to wait until the coming week when a steady dose of bonds sales is expected.

Jobs continued to be added in the United States, according to data from the Labor Department, but at a slow pace. Some bonds were wider on Friday after the numbers came out in the morning, a source said.

There is between $20 billion and $30 billion in supply expected to price in the coming week, including "a bunch of sovereigns - maybe some banks," according to one market source.

The market source said that $20 billion was in the pipeline, and that $30 billion was perhaps a little bit optimistic.

"You never know," the source said of the supply possibilities. "There are a bunch of FIG names lined up. The tone was good this week and a bunch of yesterday's deals are performing well in trading."

Many of these financials are angling to price bonds ahead of the earnings blackout coming up, the source said.

In other news, Allstate Corp. gave terms for its $500 million sale of fixed-to-floating rate notes due 2053 that was priced late Thursday.

The deal was doing well even ahead of pricing, but popped come Friday's session.

The trader said "big blocks" of the notes were trading around $25.65 at midday. After the close, the trader said the securities ended at $25.67 bid.

"It sounds a little nuts to me," the trader said, noting that he had "a different opinion of where interest rates are going."

Still, he said the overall structure of the deal, with its "floating component" and a 10-year call lockout, was "decent."

"They didn't give out a lot," he said of the underwriting group. There was no selling group. The gains seemed "organic," he said, and not due to managers covering shorts.

Meanwhile the recent issues from General Electric Capital Corp. and Ford Motor Co. were both particularly active Friday, trading tighter during the session.

In other trading, bank paper from Goldman Sachs and Citigroup performed better.

Ford tightens

Ford Motor's notes closed the session 3 bps tighter at 184 bps bid, 181 bps offered, a trader said, although that level was still wider than where the bonds had priced.

The trader added that the deal went great for the company, though Ford has a tendency to price things on the screws, as he put it.

Many insurance funds wanted exposure to 30-year paper in the automotive space, the trader continued, but those who went along for the ride are now under water.

Ford Motor brought the $2 billion sale of 4.75% 30-year bonds to market on Thursday, pricing the debt to yield Treasuries plus 180 bps.

The notes were originally quoted 7 bps wider at 187 bps bid, 181 bps offered near the end of Thursday's trading.

GE notes active

Meanwhile, General Electric's $1.4 billion of 1% three-year notes was seen at 68 bps bid, 65 bps offered after trading at 68 bps offered late Thursday.

The notes sold at a spread of Treasuries plus 72 bps on Thursday.

The $2 billion tranche of 3.1% 10-year notes was quoted 3 bps better at 119 bps bid, 117 bps offered.

The notes sold at a spread of 122 bps over Treasuries before tightening to 122 bps bid, 118 bps offered on Thursday.

General Electric Capital also priced a $600 million tranche of floating-rate notes as part of the $4 billion offering.

The funding arm of General Electric Co. is based in Norwalk, Conn.

Goldman Sachs better

The secondary market also saw Goldman Sachs' bond due 2018 tighten 5 bps to 159 bps bid on Friday.

The bank priced $1.5 billion of 6.15% 10-year bonds in April 2008 at Treasuries plus 237.5 bps.

Citi widens

In other trading, Citigroup's 6.375% notes due 2014 tightened 1 bp from Thursday's levels to 96 bps bid.

The bank priced $2.5 billion five-year notes at Treasuries plus 380 bps on Aug. 5, 2009.

Allstate gives hybrid terms

Allstate priced $500 million of $25-par fixed-to-floating rate subordinated debentures due Jan. 15, 2053, according to an FWP filed with the Securities and Exchange Commission.

The deal priced late Thursday.

Joint bookrunners were J.P. Morgan Securities LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch.

The interest rate will be fixed at 5.1% - tighter than initial talk of 5.25% - through Jan. 15, 2023.

After Jan. 15, 2023, the debentures' interest rate will convert to floating, which will be calculated at Libor plus 316.5 bps.

The Northbrook, Ill.-based insurance company will use proceeds for general corporate purposes, including the repurchase of common stock through open market purchases or through an accelerated purchase program.

Stephanie N. Rotondo and Paul A. Harris contributed to this review

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