New issue activity stagnates as earnings season kicks off; Hartford Financial notes firm

By Sheri Kasprzak and Aleesia Forni

New York, April 16 - Primary activity was extremely light on Tuesday as earnings results came in for the first quarter, market sources said.

"It is extremely quiet all over," said one sellside source of the primary market on Tuesday.

First-quarter earnings reports were expected from Goldman, Sachs & Co., U.S. Bancorp Investments Inc., Johnson & Johnson Co. and Coca Cola, Jody Lurie, corporate credit analyst with Janney Montgomery Scott LLC, noted.

The Markit CDX Series North American Investment Grade index was 2 bps tighter at a spread of 82 bps on Tuesday.

Secondary activity also remained light.

"Secondary trading volumes were down 5% versus the average daily volume," Lurie wrote.

"Interestingly, the lack of volume came from reduced activity in investment-grade credits, whereas high-yield trading was well above the average day's levels."

Hartford Financial Services Group Inc.'s recent deal was among the day's most actively traded deals.

A trader quoted the 4.3% notes due 2043 4 bps tighter on the day.

Investment-grade bank and broker credit default swap costs were tighter on the session, according to a market source

Bank of America Corp.'s CDS costs were 7 bps tighter at 124 bps bid, 128 bps offered. Citigroup Inc.'s CDS costs declined 7 bps to 105 bps bid, 109 bps offered. JPMorgan Chase & Co.'s CDS costs were 4 bps tighter at 85 bps bid, 90 bps offered. Wells Fargo & Co.'s CDS costs tightened 2 bps to 70 bps bid, 74 bps offered.

Merrill Lynch's CDS costs were 4 bps tighter at 108 bps bid, 118 bps offered. Morgan Stanley's CDS costs declined 7 bps to 139 bps bid, 143 bps offered. Goldman Sachs Group, Inc.'s CDS costs tightened 5 bps to 126 bps bid, 131 bps offered.

Hartford notes firm

Hartford's $300 million of 4.3% senior notes due 2043 was quoted 4 basis points better at 141 bps bid, 137 bps offered.

A trader at another desk saw the notes trading at 143 bps bid, 140 bps offered earlier during the session.

Hartford sold the notes at a spread of Treasuries plus 145 bps on Monday.

Based in Hartford, Conn., the issuer is a financial services holding company and parent company for the Hartford Insurance Co.

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