Sovereigns rule as EDC, IADB fill corporate void; secondary tone positive as Goldman firms

By Aleesia Forni and Andrea Heisinger

New York, July 17 - Corporate issuance was lacking in the investment-grade bond market Wednesday as comments from Federal Reserve chairman Ben Bernanke kept companies on the sidelines.

An issue from Export Development Canada started the day. The sovereign priced $500 million of two-year floating-rate notes.

Inter-American Development Bank announced it would price $300 million of two-year floaters.

Elsewhere, the market watched for reactions of Bernanke speaking before the House Financial Services Committee on Wednesday. He said that the Fed would continue its stimulus efforts until the economy improved enough to scale them back.

There was volatility in the market in June after Bernanke said stimulus efforts would be scaled back later this year and into early 2014, but he later clarified those remarks.

"We should see some activity tomorrow now that [Bernanke's talk] is over," a market source said. "No real huge moves today. It's a light week."

Traders in the preferred stock market saw movement in some recent issues.

Wells Fargo & Co.'s $1.5 billion of 5.85% series Q class A fixed-to-floating rate noncumulative preferreds were ticking up a touch to $25.05, a trader said.

After the market closed, a source said saw the issue, the most actively traded preferred of the day, closing at $25.19.

Farm Credit Bank of Texas' Rule144A offering of 6.75% fixed-to-floating rate $100-par class B series 2 noncumulative perpetual preferreds were meantime pegged at par bid.

Another source said he heard the issue was closer to par ¼ bid.

In corporate secondary action, traders noted that spreads moved tighter overall on Wednesday during a session that saw a positive tone.

The Markit CDX North American Investment Grade index was 1 basis point tighter at a spread of 76 bps at the day's close.

Meanwhile, one trader quoted the recent deal from Goldman Sachs Group Inc. 11 bps better near the end of the session.

EDC's floater

Export Development Canada sold $500 million of two-year floating-rate notes (Aaa/AAA/) at par to yield one-month Libor flat, a market source said.

Bookrunners were Deutsche Bank Securities Inc., Goldman Sachs & Co. and TD Securities (USA) LLC.

The government-backed agency for exporters is based in Ottawa.

Inter-American plans two-year

The Inter-American Development Bank announced a $300 million offering of two-year floating-rate notes (Aaa/AAA/), a source away from the sale said.

It was not clear at press time if the sale had priced.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. are bookrunners.

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

Goldman firms

A trader quoted the recent deal from Goldman Sachs 11 bps better late Wednesday at a spread of 144 bps bid, 140 bps offered.

The notes firmed 3 bps compared to levels seen earlier during the session at another desk.

Goldman Sachs sold the $2.5 billion senior unsecured notes due 2018 at a spread of 155 bps over Treasuries on Tuesday.

The investment bank is based in New York.

Stephanie N. Rotondo contributed to this review

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