Primary empty as jobs report released; coming short week seen busy; Bank of America notes firm

By Aleesia Forni and Andrea Heisinger

New York, Oct. 5 - The investment-grade bond market was quiet on Friday as a positive jobs report for September was released.

The report showed that unemployment was below 8% for the first time in four years.

New issues were plentiful during the week. Issuance was nearly $24 billion, more than the predicted range of $15 billion to $20 billion.

The shortened four-day week ahead is projected to have about "$15 billion - maybe higher" of new deals, a syndicate source said.

"We already have people looking at Tuesday, Wednesday and Thursday," the source said.

A market source was more conservative, pegging the coming week at $10 billion to $15 billion.

"It should be a little slower," the source said.

Some bank and financial companies are already in earnings blackout, which is why the high-grade market has seen an uptick in deals from so-called "Yankee companies," or those based in other countries, the syndicate source said.

The same deal flow is expected but minus the mega-deals like the $7 billion offering from General Electric Co. that started the week.

Friday saw an improvement in market tone thanks to the reduction in unemployment in the past month.

"Everything's tighter," a source said. "We're seeing things between 5 to 40 bps tighter. It's feeling better."

Bank of America tighter

Bank of America Corp.'s $1.75 billion of 1.5% three-year notes were seen "offered in the 108 [basis points] area," one trader said early in the day, following Thursday's pricing with a spread of 120 bps over Treasuries.

Meanwhile, the bank's 7.625% notes due 2019 tightened 13 bps to 142 bps bid.

The bank priced $2.5 billion of the notes on May 8, 2009 at 410 bps over Treasuries.

Goldman Sachs, JPMorgan too

In other bank paper, Goldman Sachs Group, Inc.'s notes due 2018 tightened 10 bps to 191 bps bid on Friday.

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

The 6.3% notes due 2019 from JPMorgan Chase & Co. also saw some tightening in the secondary, closing the day 14 bps better at 65 bps bid.

JPMorgan priced $3 billion of the 10-year bonds on April 16, 2009 at 305 bps over Treasuries.

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