More issuance than expected for week; First American sale delayed; bonds flat on early close

By Andrea Heisinger and Cristal Cody

New York, May 27 - There were no new deals Friday to close out the week, which had far more new issuance than expected.

The range for the week was talked between $10 billion and $12 billion, but according to Prospect News data as of early Friday, there had been $27.86 billion in 32 deals.

That total was helped along by huge offerings from Caterpillar Inc. and Hewlett-Packard Co. The tone took a dive on Wednesday, and issuance fell in the latter half of the week.

A deal announced early in the week by First American Financial Corp. has been postponed, a source said.

Issuers who had to issue this week did so, while others are holding off until after the long Memorial Day weekend.

"We should be busy [on Tuesday] if nothing happens," a syndicate source said. "If we have [bad] headlines, it could be Wednesday."

Secondary trading was nearly at a standstill as most market participants left early or took Friday off ahead of the long weekend.

"It was extremely quiet," a trader said. "We were one of the only full shops on the entire Street this morning. We didn't do much of anything."

New issues were seen going out unchanged. Hewlett-Packard's and Caterpillar's notes held strong.

"There was nothing big happening," the trader said.

The Markit CDX Series 14 North American Investment Grade index eased 1 basis point to a spread of 91 bps on Friday, Markit Group Ltd. said.

First American delays sale

First American Financial has postponed a sale of 10-year senior notes (Baa3/BBB-), a source said on Friday.

The deal was announced late on Tuesday. Pricing has been postponed "indefinitely," the source said. It had been delayed in pricing, and the size was dropped from an announced $400 million to $250 million.

The notes were being sold under Rule 144A.

The bookrunners are J.P. Morgan Securities LLC, UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds are earmarked to pay off $200 million on a credit line and term debt out at a fixed rate.

The financial services, title insurance and settlement company is based in Santa Ana, Calif.

Caterpillar strong

Caterpillar's 3.9% notes due 2021 (A2/A/A) priced on Tuesday went out unchanged but stronger from the initial pricing, at trader said.

The notes traded at the 83 bps area, 2 bps tighter than the spread price of 85 bps over Treasuries.

The heavy machinery maker is based in Peoria, Ill.

HP unchanged

Hewlett-Packard's 10-year notes continued to stay a couple basis points tighter in the secondary market after pricing on Wednesday, according to a trader.

The 4.3% notes due 2021, which priced at 120 bps over Treasuries, were seen trading at 118 bps bid.

The information technology company is based in Palo Alto, Calif.

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