Primary sees $39 billion week; AT&T weaker; Home Depot long bonds firm

By Aleesia Forni and Cristal Cody

Virginia Beach, June 12 – Volatile market conditions did little to hinder issuance in the investment-grade bond market this week.

The primary market hosted more than $39.8 billion of new issuance, blowing away earlier predictions of around $25 billion.

This brings June’s total issuance to roughly $63 billion so far.

Meantime, Lipper reported $110 million of outflows from corporate high-grade funds for the week ended June 10, bringing the year-to-date total to roughly $29 billion of inflows.

Lipper reported $231 million of inflows for the prior week.

The pace of issuance is expected to continue in the week ahead, with another $25 billion to $30 billion predicted to price.

The bulk of supply is expected to come to market at the week’s start ahead of the Federal Reserve’s statement on Wednesday following the two-day Federal Open Market Committee meeting.

Investment-grade bonds headed out mixed in secondary trading, while credit spreads widened on Friday.

The Markit CDX North American Investment Grade series 23 index eased 2 basis points to a spread of 68 bps.

AT&T Inc.’s 3.4% notes due 2025 widened 5 bps over the day.

Home Depot Inc.’s 4.25% bonds due 2046 firmed 1 bp in trading.

AT&T widens

AT&T’s 3.4% notes due 2025 widened 5 bps on Friday to 170 bps bid, according to a market source.

The company sold $5 billion of the notes (/BBB+/A-) on April 23 at a spread of Treasuries plus 150 bps.

The telecommunications company is based in Dallas.

Home Depot better

Home Depot’s 4.25% notes due 2046 firmed 1 bp to 131 bps bid in secondary trading on Friday, a source said.

The company sold $1.25 billion of the bonds (A2/A/A) on May 28 at Treasuries plus 135 bps.

The home improvement retailer is based in Atlanta.

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