Issuance to spike in coming week, $20 billion expected; Scana, JPMorgan firm in trading

By Andrea Heisinger and Cristal Cody

New York, May 6 - Bond issuance took a brief break in the high-grade primary Friday following days with a steady stream of deals.

The coming week is expected to be busier, syndicate sources said, as markets in Asia and Europe are back to full speed following vacations and holidays, and as more companies emerge from earnings blackouts.

"I would say we're going to be pretty slammed," said one source. "It looks like it's going to start at the beginning of the week."

There were a lot of calls being made on Friday, building momentum, and possibly drawing other potential issuers out of the woodwork.

"Everyone's all excited," the source said.

One syndicate desk was predicting $20 billion or more, with a possibility of hitting $25 billion. There are several marquee deals set to hit the market on Monday, a source from that desk said.

"Some of those were trades postponed or held from this week," they said. "We also have to keep in mind the news of Greece possibly exiting the euro. That could transfer to next week."

Bonds for the coming week are expected to come from all sectors, and there will be "plenty of corporates," said one market source.

Secondary trading was light on Friday.

Overall investment-grade Trace volume fell 25% to less than $10 billion, a market source said.

"Quiet day, seemed like a lot of people were out," one trader said.

The Markit CDX Series 14 North American investment-grade index firmed 1 bp to a spread of 90 bps, according to Markit Group Ltd.

In the secondary market, Scana Corp.'s new notes due 2021 tightened, a source said.

JPMorgan Chase & Co.'s notes also traded 2 bps to 4 bps tighter, a trader said.

R.R. Donnelly & Sons Co.'s bonds were flat on Friday but still weaker since the company announced a $1 billion share buyback program on Wednesday, a trader said.

Treasuries closed mixed on Friday on unconfirmed rumors that Greece officials are meeting to discuss leaving the euro zone. On the longer end of the curve, the 10-year benchmark Treasury note yield was flat at 3.15%, while the 30-year bond yield rose 2 bps to 4.28%.

Scana tightens

Scana's new notes were seen tighter in secondary trading, firming to 156 bps bid, 151 bps offered, a trader said Friday.

The company sold $300 million of 4.75% 10-year medium-term notes (Baa2/BBB/BBB+) to yield 160 bps over Treasuries on Thursday.

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

JPMorgan firmer

JPMorgan Chase & Co.'s deal from the previous day also firmed in the secondary market Friday, a trader said.

The bank sold $2 billion of 4.625% 10-year notes (Aa3/A+/AA-) at a spread of Treasuries plus 148 bps.

The notes narrowed to 146 bps bid, 144 bps offered late Friday.

Another trader said the bulk of trades were in "the 142, 144 area."

The financial services company is based in New York City.

R.R. Donnelly down

Since R.R. Donnelly & Sons announced a share buyback program, the company's bonds have fallen in trading, sources said.

On Friday the 7.625% notes due 2020 traded at 101.75, 102.125, a trader said.

The notes were down 3½ points at 101.75 bid, 102.25 offered on Thursday.

The commercial printing company is based in Chicago.

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