Investment-grade bonds see quiet start to 2009; secondary dead on lack of new issues, headlines

By Andrea Heisinger

New York, Jan. 2 - It was a quiet day in the investment-grade primary bond market Friday, with little to no new issue activity.

A source said after the market close that there was "absolutely nothing happening."

A secondary source said something similar, adding that desks were very thinly staffed.

New issues set to pick up

The year got off to a slow start Friday, but promises to pick up in the coming week, a source said.

The lack of activity after the holidays was to be expected, he said.

"I don't think anyone's really working today," he said. "Everyone's back next week, so it should be busier."

There will likely be some corporate issuance in the coming week, and also a continuation of fund-raising under the Federal Deposit Insurance Corp. Temporary Liquidity Program.

This program saw about $100 billion in issues the last few weeks of 2008. Much more is expected before the program's conclusion in June, sources said, with a wider variety of names tapping the guarantee.

General Electric Capital Corp. is expected to do a second round of issuance under the program, a source said before the holidays.

Other issuers are unknown, but there are thousands of potential names that could price an offering under the program, a source said.

Despite the large size of most of the previous issues, many of those upcoming could be smaller, he said, and more from regional banks.

Secondary seen slow

A trader said late Friday afternoon that there was nothing happening in the secondary market and that many people had headed home early.

There was little in the way of news, good or bad, about corporate or financial names that could affect trading, he said.

"We didn't see anything moving today," he said.

GE Capital tops trading

General Electric Capital Corp. was seen at the top of trading volume Friday afternoon. The company's 3% notes due 2011 were at the top of the list that continues to be dominated by financial names.

Coming in second in trading was JPMorgan Chase & Co. with its 3.125% notes due 2011.

Citigroup Inc.'s 2.875% notes due 2011 were also trading.

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