Week comes to quiet close; moderate high-grade issuance seen post-holiday; Corning, banks firm

By Andrea Heisinger and Cristal Cody

New York, Feb. 17 - The high-grade bond market saw no new deals on Friday and ended the week as quietly as it began.

The bulk of issuance came on Tuesday, and other days saw only a trade or two. According to Prospect News data, there was about $12.19 billion of notes priced in 16 deals.

The coming week could be "a little busy," with estimates of issuance between $10 billion and $15 billion.

"We thought there'd be more this week," one market source said. "I could see it picking up next week."

Whether companies come to the market right away on Tuesday following the long Presidents Day holiday weekend is unclear. It depends on whether any news related to Greece or other European countries come out before then.

"Hopefully Greece doesn't fall apart," the market source said. "We'll have a couple of people looking on Tuesday."

Syndicate desks will also be fully staffed at the top of the short week, or as one source said, "It's not like Christmas where people are trickling back to their seats."

Another syndicate source said the coming week will see "nothing too crazy" and added that some companies are still in earnings blackout.

"We're estimating lower, $10 [billion] to $15 [billion] just because of the holiday and based on how this week went," the source said.

The past week's issuance was lower than some estimates of $15 billion to $20 billion.

Corporate bonds overall were flat on Friday. The Markit CDX Series 17 North American Investment Grade index ended unchanged at a spread of 99 basis points.

"Beyond dead," one trader said. "Most of the stuff I trade is unchanged."

Corning Inc.'s long bonds sold on Wednesday firmed about 8 bps in thin trading, a trader said on Friday.

Teck Resources Ltd.'s bonds sold on Thursday traded better, with the seven-year notes seen about 4 bps better.

Bank and financial paper was quoted closing up 5 bps to 10 bps better.

Barclays Bank plc's new paper traded 5 bps tighter.

Rock-Tenn Co.'s two tranches of bonds went out flat to slightly weaker from the previous day but still tighter than issuance, a trader said.

Treasuries traded flat to lower ahead of the long weekend. The benchmark 10-year Treasury note yield rose 2 bps to 2%. The 30-year bond yield was flat at 3.14%.

Corning firmer

Corning's 4.75% 30-year bonds traded tighter at 162 bps bid, 157 bps offered on Friday, a trader said.

Corning sold $500 million of the bonds (A3/BBB+/A-) on Wednesday at 170 bps over Treasuries.

The glass and display technology company is based in Corning, N.Y.

Teck's notes tighten

Both tranches that Teck Resources sold in a $1 billion offering of senior notes (Baa2/BBB) on Thursday traded better on Friday, with the shorter-dated notes tighter, a trader said.

The 3% notes due 2019 firmed to 161 bps bid, 156 bps offered. The company sold $500 million of the notes at 165 bps over Treasures.

Teck's 30-year bonds edged tighter to 207 bps bid, 202 bps offered. The bonds priced at a spread of 210 bps over Treasuries.

The diversified mining company is based in Vancouver, B.C.

Barclays firms

Barclays Bank's 2.75% senior notes due 2015 traded about 5 bps tighter to 235 bps bid, 230 bps offered in the secondary market, a trader said.

The notes priced in a $1.25 billion offering (Aa3/A+/A) on Wednesday at a spread of Treasuries plus 240 bps.

The financial services company is based in London.

Rock-Tenn mixed

Rock-Tenn's split-rated senior notes (Ba1/BBB-/) were mixed in light secondary trading, a source said on Friday.

The 4.45% notes due 2019 traded at 290 bps bid, 280 bps offered on Friday. The company sold $350 million of the notes at a spread of Treasuries plus 312.5 bps on Wednesday.

Rock-Tenn's 4.9% notes due 2022 traded at 280 bps bid, 270 bps offered. The notes priced at 300 bps over Treasuries.

The paper and packaging manufacturer is based in Norcross, Ga.

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