Light deal volume forecast; Teva holds tight; Citigroup firms; Morgan Stanley steady

By Cristal Cody

Eureka Springs, Ark., July 22 – Investment-grade issuers took a break on Friday, while new bonds priced over the week stayed tight in secondary trading.

Deal volume is expected to stay light at about $20 billion for the week ahead with the Federal Reserve’s policy meeting set for Tuesday and Wednesday, according to market sources.

Teva Pharmaceutical Finance Netherlands III BV’s $15 billion of fixed-rate senior notes (Baa2/BBB/) that priced in six tranches on Monday to help finance its acquisition of the generics business of Allergan plc remained strong in the secondary market as the week closed.

Citigroup Inc.’s 4.125% subordinated notes due 2028 tightened about 10 basis points on Friday and traded 13 bps better than issuance.

Morgan Stanley’s 3.125% global medium-term notes due 2026 priced on Wednesday headed out mostly unchanged over the session but remained better than issuance.

The Markit CDX North American Investment Grade index ended the day about 1 bp better at a spread of 71 bps.

Teva stronger

Teva’s 3.15% notes due 2026 headed out at 144 bps bid, 142 bps offered in secondary trading on Friday, a source said.

The company sold $3.5 billion of the notes on Monday at a spread of 160 bps over Treasuries.

Teva’s tranche of 4.1% notes due 2046 traded better at 170 bps bid, 169 bps offered on Friday.

Teva sold $2 billion of the bonds in Monday’s offering at 185 bps plus Treasuries.

The pharmaceutical company is based in Jerusalem.

Citigroup firms

Citigroup’s 4.125% subordinated notes due 2028 traded stronger on Friday at 245 bps bid, 242 bps offered, according to a market source.

The notes were seen on Thursday at 252 bps offered.

Citigroup sold $1.5 billion of the notes (Baa3/BBB/A-) on Monday at a spread of 258 bps over Treasuries.

The financial services company is based in New York.

Morgan Stanley steady

Morgan Stanley’s 3.125% notes due 2026 were mostly unchanged on Friday at 157 bps bid, 155 bps offered, a market source said.

Morgan Stanley sold $3 billion of the notes (A3/BBB+/A) on Wednesday at a spread of 163 bps over Treasuries.

The financial services company is based in New York City.

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