JPMorgan Chase, Scana sell as tone holds; GE Capital, R.R. Donnelly weaker; Kraft bonds flat

By Andrea Heisinger and Cristal Cody

New York, May 5 - Volume in the high-grade bond market scaled back even more on Thursday as Scana Corp. and JPMorgan Chase & Co. offered paper.

The electricity provider Scana sold $300 million of 10-year notes.

JPMorgan priced $2 billion of 10-year notes in a quick sale.

One source who worked on one of the day's sales said there wasn't much to distract the market, but noted that supply for the week had dwindled.

"We've already been pretty robust," he said, referring to the week's issuance total of roughly $12.5 billion as of late in the day.

There may have been some distraction from President Barack Obama's visit to Ground Zero, he said, but "nothing noticeable."

"This week's been productive," another market source said. "Not sure we'll close out the week with [a deal]."

Issuance is expected to pick up again in the coming week as both Europe and Asia are back in and more corporate names plan to issue after earnings.

Overall investment-grade Trace volume dropped 10% to about $13.5 billion on Thursday, a market source said.

The Markit CDX Series 14 North American investment-grade index eased 1 bp to a spread of 91 bps, according to Markit Group Ltd.

"The market's really weak today," a trader said. "JPMorgan printed a 10-year deal, so most things are weaker in sympathy."

Credit default swaps for financials were 5 bps wider, a source said.

In other trading, General Electric Capital Corp.'s new notes due 2016 widened on the bid side, a trader said.

Bonds from Kraft Foods Inc., which reported earnings on Thursday, traded 2 bps wider early in the day but came back to unchanged by the end of the trading session, a source said.

In other trading, R.R. Donnelly & Sons Co.'s bonds have weakened since the company announced lower first-quarter earnings early Wednesday and a $1 billion share buyback program, a trader said.

Government bonds rallied, sending yields down 6 basis points to 7 bps on the long end of the curve on a gain in weekly unemployment claims. The 10-year Treasury note yield ended the day down 7 bps to 3.15%. The 30-year bond yield fell 6 bps to 4.26%.

Scana's 10-year notes

Scana sold $300 million of 4.75% 10-year medium-term notes (Baa2/BBB/BBB+) to yield 160 bps over Treasuries, a source close to the sale said.

Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC were bookrunners.

Proceeds are being used to pay $300 million of medium-term notes due at maturity on May 15.

The electric generation, transmission and distribution company is based in Cayce, S.C.

JPMorgan sells $2 billion

JPMorgan Chase sold $2 billion of 4.625% 10-year notes (Aa3/A+/AA-) at a spread of Treasuries plus 148 bps, a market source said.

J.P. Morgan Securities LLC was bookrunner.

Proceeds are being used for general corporate purposes.

In the secondary market, JPMorgan's new 10-year deal traded flat at 148 bps bid, 147 bps offered, a trader said.

The financial services company is based in New York City.

GE Capital widens

General Electric Capital's notes (Aa2/AA+) sold the previous day were 10 bps wider on the bid side, an informed source said.

The $1.5 billion tranche of 2.95% five-year notes priced at a spread of 105 bps over Treasuries.

"The five-years are 115, 105 today," a trader said.

The financing arm of General Electric Co. is based in Fairfield, Conn.

R.R. Donnelly down

R.R. Donnelly & Sons' 7.625% notes due 2020 closed the day down 3½ points at 101.75 bid, 102.25 offered, a trader said.

The company's notes have dropped since it announced earnings early Wednesday in addition to a $1 billion share buyback program.

"That's led them to be down about 3 to 4 points in the last two trading sessions," a trader said.

On Thursday, Fitch Ratings said it placed the company's BBB- issuer default rating on Rating Watch negative, citing the share repurchase plan.

The commercial printing company is based in Chicago.

Kraft ends unchanged

Also in trading, Kraft's bonds widened after the company reported lower earnings but came back to end the day unchanged, a trader said.

The company reported earnings of $799 million, compared to $1.8 billion in the year-ago period.

In the secondary market, Kraft's 5.375% notes due 2020 traded flat at 105 bps bid, 100 bps offered, the trader said.

The food and drink manufacturer is based in Northfield, Ill.

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