IADB prices; Duke Energy eases in thin trading; Darden Restaurants widens on offered side

By Cristal Cody and Aleesia Forni

Virginia Beach, Oct. 11 - The high-grade primary bond market closed the week on a quiet note Friday.

The session did see a new issue from the Inter-American Development Bank.

The company priced a $100 million tap of its existing 1.125% notes due 2017 at 100.53 to yield 0.966%, according to an informed source.

This week's total fell short of original estimates, as the U.S. government shutdown entered its second week and concerns over the debt ceiling were heightened.

Players had expected $5 billion to $10 billion of new paper for the week, though the actual total fell at roughly $3.5 billion, according to Prospect News data.

Trading stayed mostly light over the session with bonds slightly better overall, sources said.

The Markit CDX North American Investment Grade series 21 index firmed 2 basis points to a spread of 77 bps.

"It's over. Not much activity," one source said.

Duke Energy Corp.'s new 3.95% notes due 2023 eased about 2 bps from Thursday's session, according to a trader.

Trading remained light in Darden Restaurants Inc.'s bonds as investors showed little reaction to reports that Barington Capital Group, LP has taken a small stake in the stock of the operator of Olive Garden and Red Lobster restaurant chains, according to traders on Friday.

"Nothing's really traded," one trader said.

The company's bonds widened on the offered side, according to a trader.

IADB adds on

The Inter-American Development Bank sold a $100 million add-on to its 1.125% notes due March 15, 2017 at 100.53 to yield 0.966%, an informed source said.

Barclays was the bookrunner.

The provider of development financing for Latin America and the Caribbean is based in Washington, D.C.

Duke Energy eases

Duke Energy's 3.95% notes due 2023 (Baa1/BBB/BBB+) eased to 125 bps bid, 122 bps offered on Friday, a trader said.

The notes were quoted about 7 bps tighter on Thursday at 123 bps bid, 120 bps offered.

Duke Energy sold $400 million of the notes at a spread of Treasuries plus 135 bps on Tuesday.

The diversified energy company is based in Charlotte, N.C.

Darden Restaurants trades thin

Darden Restaurants' 3.35% notes due 2022 (Baa2/BBB-/BBB) were quoted offered at 220 bps on Friday, a trader said.

The notes were offered at 215 bps on Thursday, according to another market source.

The company sold $450 million of the notes on Oct. 1, 2012 at a spread of Treasuries plus 175 bps.

In other trading, Darden Restaurants' 4.5% notes due 2021 were quoted on Friday at 200 bps offered.

The company sold $400 million of the notes in 2011 at a spread of Treasuries plus 265 bps.

The chain restaurant owner and operator is based in Orlando, Fla.

Bank/brokerage CDS levels fall

Investment-grade bank and brokerage CDS levels declined on Friday, according to a market source.

Bank of America Corp.'s CDS costs firmed 3 bps to 101 bps bid, 105 bps offered. Citigroup Inc.'s CDS costs tightened 2 bps to 93 bps bid, 97 bps offered. JPMorgan Chase & Co.'s CDS costs firmed 2 bps to 86 bps bid, 90 bps offered. Wells Fargo & Co.'s CDS costs tightened 2 bps to 57 bps bid, 61 bps offered.

Merrill Lynch's CDS costs firmed 2 bps to 103 bps bid, 107 bps offered. Morgan Stanley's CDS costs tightened 2 bps to 131 bps bid, 136 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 2 bps to 125 bps bid, 130 bps offered.

Paul Deckelman contributed to this review

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