Greek financial crisis continues to reduce high-grade primary activity; bank paper widens

By Aleesia Forni

Virginia Beach, July 6 – The investment-grade bond market was quiet to open the week on Monday, as the debt crisis in Greece kept potential issuers away from the day’s primary.

The session did see Bank Nederlandse Gemeenten NV set price talk for a planned offering of floating-rate notes slated to price during Tuesday’s session.

Sources had called for around $20 billion of supply for the first full week of July, though the week’s supply going forward will largely depend on the situation in Greece.

Spreads continued to leak wider in the secondary market on Monday.

The Markit CDX North American Investment Grade series 23 index eased 3 basis points to a spread of 71 bps.

Meantime, bank and financial paper was around 1 bp weaker on the day overall, according to a market source.

Citigroup Inc.’s 3.3% notes due 2025 firmed 5 bps during the day’s trading, while Goldman Sachs Group, Inc.’ 3.5% notes due 2025 were flat.

BNG sets talk

In primary happenings on Monday, Bank Nederlandse Gemeenten set price talk for a planned $500 million offering of two-year floating-rate notes in the area of Libor plus 7 bps, according to a market source.

The deal (Aaa/AA+/) is set to price on Tuesday via bookrunners BofA Merrill Lynch and TD Securities.

The local government funding agency is based in the Hague, the Netherlands.

Citigroup firms

In secondary market action, Citigroup’s 3.3% notes due 2025 firmed 5 bps over the session to 139 bps bid, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

Goldman unchanged

Goldman Sachs’ 3.5% notes due 2025 were unchanged on the day at 151 bps bid, a source said.

Goldman sold $800 million of the notes (Baa1/A-/A) in a March 25 reopening at 145 bps plus Treasuries.

The notes originally priced on Jan. 20 in a $1.7 billion offering at Treasuries plus 170 bps.

The financial services company is based in New York City.

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