Modest week ends with no new supply; issuers in 'coupon shock'; Roper notes weaken in trading

By Aleesia Forni and Andrea Heisinger

New York, May 31 - No issuers graced the investment-grade bond market on Friday, which ended a shortened week of modest supply.

The bond market was closed on Monday for Memorial Day, and a bit less than $11 billion of notes were sold during the following three days. That was less than the projected $15 billion to $20 billion of issuance.

No sales were expected on Friday, and unemployment numbers came out for the euro zone, showing the highest level since the economic crisis began there of about 12.2% for April.

Between $15 billion and $20 billion of new bonds are expected for the coming week, sources said late Friday.

"It should be closer to $20 [billion]," one source said, adding that it depends on how much issuance gets done before payroll numbers for May come out that Friday.

"Everyone's been watching the curve," the source said. "There's been some coupon shock out there."

Issuers have been faced in the past week with rising coupons after a long period of record-low rates.

The Markit CDX Series 20 North American Investment Grade index was 3 basis points wider at a spread of 79 bps on Friday.

In secondary market action, Thursday's new issue from Roper Industries, Inc. traded wider on Friday, while the recent bonds from Florida Power & Light Co. were quoted 1 bp tighter, one trader said.

Roper Industries' $800 million of 2.05% five-year senior notes traded 2 bps wider on the day.

The notes were quoted at 110 bps bid, 105 bps offered. They sold Thursday at a spread of Treasuries plus 110 bps and were quoted at 108 bps bid near that day's close.

The diversified industrial technology company is based in Sarasota, Fla.

Meanwhile, Florida Power & Light's $500 million issue of 2.75% 10-year first mortgage bonds traded 1 bp tighter on Friday at 67 bps bid, 65 bps offered.

The notes were sold at a spread of Treasuries plus 68 bps.

The utility subsidiary of NextEra Energy Inc. is based in Juno Beach, Fla.

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