High-volume week ends with no new deals; coming week seen as busy; RBS, GE Capital widen

By Andrea Heisinger and Cristal Cody

New York, Jan. 7 - There were no new high-grade bonds priced to end a busy week Friday as unemployment numbers for December were released.

The numbers were better than expected, so that could mean more volume for Monday if conditions hold over the weekend, a source said.

"Nothing official yet, but I'm hearing we'll have some deals off the bat," he said.

There has been more than $44.58 billion of new bonds priced so far in January, mostly on Tuesday and Wednesday.

The source said he "wasn't sure" that issuance would be as strong in the coming week but added that there are still companies needing to price debt before earnings.

Another syndicate source said that most of the larger deals already got out of the way during the past week, like the $6 billion sale from General Electric Capital Corp.

In the secondary market, new bonds sold earlier in the week by Royal Bank of Scotland plc and GE Capital continued to widen, according to sources.

The financial sector was weaker during active trading on Friday.

"Financials were off about 10 basis points, but now they're closing about 2 wider on the day," a trader said.

In other investment-grade activity, bonds in the telecommunications sector moved out about 5 bps in the secondary, a source said.

Overall investment-grade Trace volume fell 40% to about $10.5 billion, according to a market source.

"It was pretty active in the morning, and then around lunch, thing started to die out," a source said. "In the afternoon, we came back around a little bit."

The Markit CDX Series 14 North American investment-grade index, which fell 4 bps on Thursday, closed Friday 2 bps weaker at a spread of 89 bps, Markit Group Ltd. said.

Treasuries rallied on Friday after the highly anticipated December jobs report came in much lower than forecast and as sovereign credit default swaps rose overseas.

The 10-year Treasury note yield fell to 3.32% from 3.40%. The 30-year bond fell 3 bps to 4.48%.

Macquarie sells bonds

Macquarie Group priced $750 million of 6.25% 10-year senior notes late on Thursday at 300 bps over Treasuries, an informed source said.

The notes (A2/A-/A) sold under Rule 144A.

Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. and Macquarie were bookrunners.

Macquarie's notes due 2021 widened out in secondary trading, a source said.

"Last I saw, it was 307, 302."

The global investment bank and financial services company is based in Sydney, Australia.

RBS widens in trading

RBS' new notes due 2021 moved out 5 bps to 10 bps in secondary trading early Friday, a trader said.

RBS sold $2 billion of senior notes (Aa3/A+/AA-) in two tranches that included 3.25% notes due 2014 at Treasuries plus 235 bps and 6.125% notes due 2021 at a 285 bps spread.

The 10-year notes are 20 bps wider on the bid side since they priced on Tuesday.

"It's closing 305, 295 right now," the trader said. "It's close to unchanged on the day now after being off 5 to 10 earlier in the day.

The financial services company is based in Edinburgh.

GE Capital weaker

GE Capital's new notes due 2021 also widened in the secondary.

GE Capital sold the 4.625% 10-year notes (Aa2/AA+) on Tuesday at a spread of 135 bps over Treasuries.

"GE's closing out 142, 137," a trader said Friday afternoon.

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

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