Slow week wraps with quiet Friday; spreads tighten in thin trade; Verizon notes rise

By Cristal Cody and Aleesia Forni

Virginia Beach, Dec. 20 - The high-grade primary market closed the week on a quiet note Friday, with no new issues coming to market during the session.

Roughly $4 billion of bonds were priced during the week, with Monday's market seeing the majority of the action.

Sources had predicted $5 billion of high-grade supply for the week.

No deals are lined up to price next week, and many sources expect activity to have wrapped up for the rest of the year.

However, players are predicting a rush of new deals to hit once the new year begins.

"Things should heat back up in January," a market source said on Friday.

Bond spreads closed slightly tighter despite light secondary action and thin trading over the day as the Street cleared, market sources said.

"It's quiet," a source said. "A lot of people closed down after 12 o'clock. Trade volume is down about 20% versus the average day."

The Markit CDX North American Investment Grade series 21 index firmed 1 basis point to a spread of 65 bps late Friday.

In the secondary market, Verizon Communications Inc.'s bonds rallied over the week, according to market sources. The company's 5.15% notes due 2023 headed out higher on Friday, a source said.

Verizon higher

Verizon's 5.15% notes due 2023 rose to 109 going out on Friday from 107.5 earlier in the day, a market source said.

Verizon sold $11 billion of the 10-year notes (Baa1/BBB+/A-) at 99.676 to yield 5.192% on Sept. 11 in a record $49 billion eight-part offering of bonds.

The telecommunications company is based in New York City.

Bank/brokerage CDS costs drop

Investment-grade bank and brokerage CDS prices declined, according to a market source.

Bank of America Corp.'s CDS costs firmed 2 bps to 77 bps bid, 82 bps offered. Citigroup Inc.'s CDS costs declined 2 bps to 70 bps bid, 75 bps offered. JPMorgan Chase & Co.'s CDS costs firmed 1 bp to 66 bps bid, 71 bps offered. Wells Fargo & Co.'s CDS costs tightened 1 bp to 38 bps bid, 43 bps offered.

Merrill Lynch's CDS costs firmed 3 bps to 79 bps bid, 86 bps offered. Morgan Stanley's CDS costs firmed 2 bps to 86 bps bid, 91 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 3 bps to 90 bps bid, 95 bps offered.

Paul Deckelman contributed to this review.

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