JPMorgan gives deal terms; issuers continue to stand down; Northern Natural Gas bonds widen

By Aleesia Forni and Andrea Heisinger

New York, Aug. 30 - New issues were nowhere to be seen on Thursday in the high-grade bond market as the market wound down ahead of the Labor Day holiday.

JPMorgan Chase & Co. gave the terms of a $500 million sale of five-year floating-rate notes done on Wednesday. This was the only corporate deal of the week so far that also saw some sovereign offerings.

"Absolutely nothing happened today," a syndicate source said in mid-afternoon. "I can't believe anything would happen tomorrow either. Most desks are already basically empty."

Unless something happens during the long weekend to impact the tone at Tuesday's open, there are some big deals expected from companies that have been sitting on their hands the last week or two.

"It's the summer slowdown, but everyone's been saying it will get busy," a market source said. "We have to have something of a pipeline."

The Markit CDX Series 18 North American Investment Grade index widened 2 basis points to a spread of 103 bps on Thursday.

The recent issuance from Northern Natural Gas was seen 5 bps wider during Thursday's trading, while the $400 million of 10-year notes from Fidelity National Financial Inc. traded flat compared to Tuesday's levels.

Investment-grade bank and brokerage credit default swap costs rose on Thursday.

Bank of America's CDS costs widened 5 bps to 220 bps bid, 225 bps offered. Citi's CDS costs were also 5 bps wider at 220 bps bid, 225 bps offered. JPMorgan's CDS costs widened 1 bp to 116 bps bid, 121 bps offered. Wells Fargo's CDS costs rose 1 bp to 83 bps bid, 88 bps offered.

Merrill Lynch's CDS costs were 2 bps wider at 222 bps bid, 232 bps offered. Morgan Stanley's CDS costs widened 6 bps to 318 bps bid, 323 bps offered. Goldman Sachs' CDS costs rose 3 bps to 240 bps bid, 245 bps offered.

JPMorgan gives terms

JPMorgan Chase sold $500 million of five-year senior medium-term floating-rate notes, series H, at par to yield Libor plus 110 bps, according to a 424B2 filing with the Securities and Exchange Commission.

The bookrunner was J.P. Morgan Securities LLC.

The financial services company is based in New York.

Northern Natural Gas widens

The secondary market saw Northern Natural Gas' $250 million of 4.1% 30-year bonds trade 5 bps wider on Thursday, a trader said.

The bonds priced at Treasuries plus 130 bps on Aug. 22.

The interstate natural gas pipeline is based in Omaha.

Fidelity notes flat

Meanwhile, the 10-year notes from Fidelity National were unchanged. A trader saw the notes at 355 bps bid, 345 bps offered near the end of the session.

The Jacksonville, Fla.-based title insurance underwriter priced $400 million of the 5.5% notes on Aug. 22 at a spread of 375 bps over Treasuries.

Morgan Stanley active

In other trading, Morgan Stanley's 5.625% notes due 2019 were among the day's most actively traded issues, according to a market source.

The notes were seen at 358 bps bid, 11 bps tighter compared to Wednesday's levels.

Morgan Stanley priced $3 billion of the notes on Treasures plus 225 bps on Sept. 16, 2009.

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