High-grade primary market shuts down ahead of holidays; Charter tightens; AbbVie steady

By Cristal Cody

Tupelo, Miss., Dec. 24 – The investment-grade bond market is effectively closed for the year with not even one Securities and Exchange Commission filing posted on Christmas Eve.

The bond markets closed the session early at 2 p.m. ET and will remain closed on Wednesday for Christmas Day.

No corporate bonds have priced week to date or were brought to the primary market in the previous week.

Desks are thinly staffed this week, and no issuance is expected before the end of the year, according to syndicate sources.

Investment-grade corporate issuers have priced more than $20 billion of bonds so far in December, higher than the nearly $9 billion of volume seen in the same period last year.

Once the calendar ticks over to 2020, issuance is expected to ramp up quickly with $115 billion to $125 billion of supply forecast in January, sources report.

The Markit CDX North American Investment Grade 33 index ended Tuesday slightly tighter at a spread of 44.6 basis points from 45.05 bps on Monday.

In the secondary market, bonds were mixed in thin trading over the short session.

Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050 were among the most active issues in the secondary market on Monday and improved in light volume on Tuesday, sources said.

The split-rated notes (Ba1/BBB-/BBB-) tightened nearly 3 bps to 215.5 bps bid after closing the previous day 1 bp better.

The issue edged higher to 105.39 from 105.24 on Monday.

Charter priced a $1.3 billion add-on to the bonds on Dec. 2 at 101.964 to yield 4.677%, or a spread of Treasuries plus 240 bps via subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.

Charter originally sold the notes in a $1.5 billion offering on Oct. 15 at 99.436 to yield 4.836% and a spread of Treasuries plus 260 bps. The total outstanding is now $2.8 billion.

The broadband communications company is based in Stamford, Conn.

AbbVie unchanged

In other secondary trading on Tuesday, AbbVie Inc.’s 3.2% notes due Nov. 21, 2029 (Baa2/A-/) were unchanged at 105 bps bid, a market source said.

The company sold $5.5 billion of the notes at a Treasuries plus 130 bps spread on Nov. 12 as part of a $30 billion 10-tranche offering.

AbbVie is a biopharmaceutical company based in North Chicago, Ill.

Bristol-Myers eases

Elsewhere in the sector, Bristol-Myers Squibb Co.’s 3.4% senior notes due July 26, 2029 softened about 5 bps during the session to 72 bps bid, according to a market source.

The $4 billion of notes (A2/A+/) were priced on May 7 at a Treasuries plus 105 bps spread as part of a $19 billion nine-tranche offering.

The biopharmaceutical company is based in New York.

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