Tone boosted by E.U. summit news; window opens for deals Monday; Markel, ADT issues tighten

By Aleesia Forni and Andrea Heisinger

New York, June 29 - A weaker tone and the fact that it was a summer Friday left the primary side of the high-grade market empty.

The coming week is seen as not much better in terms of new deal volume. Monday is said to be about the only day companies will bring deals due to the mid-week Fourth of July holiday.

"I think people planned on that being an off week, so they came in this week if they needed to," a market source said ahead of the close.

Issuance is expected to be stacked heavily into the front part of the coming week.

"Based on the market being up today, Monday could be busy," a syndicate source said late on Friday.

The market received a boost at the open from news that leaders from the European Union had reached an agreement at the summit where they were gathered to use bailout funds to help troubled banks in the euro zone.

"Hopefully the tone holds, otherwise next week could be dead," the source said.

The month of July is expected to be on par with the same period in 2011, with about $50 billion to $60 billion of issuance.

Markel firms

In the secondary market, the recent issuance from Markel Corp. continued to tighten on Friday.

The 4.9% 10-year notes tightened 2 basis points from Wednesday's levels to 320 bps bid, 315 bps offered, a market source said.

The notes priced at 330 bps over Treasuries on Wednesday.

The financial holding company, primarily for specialty insurance products, is based in Glen Allen, Va.

ADT bonds tighten

Meanwhile, ADT Corp.'s $2.5 billion of senior notes also tightened on Friday, according to a bond source.

The $750 million of 2.25% five-year notes traded 10 bps tighter at 145 bps bid, 143 bps offered. The notes sold at a spread of Treasuries plus 155 bps on Wednesday.

A $1 billion tranche of 3.5% 10-year notes traded at 183 bps bid, 179 bps offered. They priced at 195 bps over Treasuries.

The $750 million tranche of 4.875% 30-year bonds were last seen at 220 bps bid, 216 bps offered. The bonds priced at a spread of Treasuries plus 230 bps.

ADT is a security and alarm system company and unit of Tyco International Ltd., based in Schaffhausen, Switzerland.

Goldman Sachs active

Goldman Sachs Group, Inc.'s 30-year bonds due 2037 were among the day's most actively traded deals, closing the session at 426 bps bid, 11 bps tighter from Thursday's levels.

Goldman Sachs priced the $2.5 billion 6.75% bond at 190 bps over Treasuries in September 2007.

Bank of America widens

In other trading, Bank of America Corp.'s 7.375% five-year notes firmed 12 bps to 282 bps bid.

The bank priced $3 billion of the notes due 2014 at Treasuries plus 537.5 bps on May 8, 2009.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.