Nasdaq prices bonds, week ahead seen top-heavy; Bank of America, G.E. Capital narrow

By Andrea Heisinger and Cristal Cody

New York, Dec. 17 - Nasdaq OMX Group Inc. capped a week of new investment-grade bond deals on Friday, while issuance in the coming week is expected to be light.

The global exchange group priced $370 million of seven-year notes after the sale went overnight from Thursday.

This was the only reported bond sale in the primary market for the day.

Sources said that the coming week should be slower with not much issuance after Tuesday or Wednesday.

"It's going to be Monday or Tuesday," one syndicate source said. "A lot of people are already out [on vacation]."

There may be some sovereign deals, but most issuers are expected to step down in the second half of the week, the source added.

Overall investment-grade Trace volume dropped 34% to about $8 billion as traders headed out for the weekend and holiday vacations, a source said.

The Markit CDX Series 14 North American investment-grade index ended Friday flat at a spread of 86 basis points, according to Markit Group Ltd.

In the secondary market, Nasdaq OMX's seven-year notes firmed 1 bp in trading, while Bank of America Corp.'s 5.875% 10-year notes, which priced on Thursday, narrowed by more than 10 bps, sources said.

Also in trading, General Electric Capital Corp.'s notes continued to tighten, with the 4.375% 10-year senior note 36 bps better in trading since the start of December, according to sources.

In other activity, Tyco Electronics Group SA's new debt was mixed in trading, a source said.

Government bonds rallied on the long end of the curve on Friday. The 10-year note yield fell to 3.33% from 3.42%. The 30-year bond yield fell to 4.44% from 4.53%.

"The market sold off too aggressively and we've got more buyers emerging now," a source said.

Nasdaq prices seven-year

Nasdaq OMX Group priced $370 million of 5.25% seven-year notes (Baa3/BBB/) at a spread of Treasuries plus 270 bps, according to a source away from the deal and a Securities and Exchange Commission filing.

The company had announced it was selling notes on Thursday in a 424B5 filing with the SEC.

J.P. Morgan Securities LLC was the bookrunner.

Proceeds are going to fund a stock repurchase and pay related fees and expenses.

The notes were seen 1 bp tighter on the bid side at 269 bps in the secondary market, a trader said.

The global exchange group is based in New York City.

Bank of America tightens

Bank of America sold $1.5 billion of 5.875% 10-year notes (A2/A/A+) at a spread of 250 bps over Treasuries on Thursday.

The notes firmed more than 10 bps in trading to 237 bps on Friday, a trader said.

Another source saw the notes tighter on the offer side at 234 bps.

"It's performed pretty well," the trader said.

The bank is based in Charlotte, N.C.

GE Capital narrows

The rest of the financial sector, including General Electric Capital, also was stronger in trading on Friday, according to sources.

"The 10-year G.E. tightened quite a bit. This whole sell-off in Treasuries caused corporate spreads to narrow a bit," one source said.

General Electric Capital's 4.375% senior notes due 2020 have come in since the start of the month.

"This morning, they were spotted at 134 [bps] to the 10-year. Looking back to Dec. 1, they were as cheap as 170 [bps]," the trader said. "They're in about 36 basis points."

The notes priced on Sept. 13 at a spread of Treasuries plus 175 bps.

Fairfield, Conn.-based G.E. Capital is the financing arm of General Electric Corp.

Tyco mixed in trading

Tyco Electronics Group sold $250 million of 4.875% 10-year notes (Baa2/BBB/BBB) at a spread of Treasuries plus 145 bps on Wednesday.

The notes were mixed in secondary trading on Friday, trading at 147 bps bid, 142 bps offered, a source said.

The holding company for Tyco is based in Luxembourg.

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