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U.S. high-grade bond issuance halts amid Greece crisis; spreads widen; Heinz bonds better
By Aleesia Forni
Virginia Beach, June 29 – Volatile market conditions spurred by fears that Greece is headed toward a default kept the U.S. investment-grade primary market empty of new issuance on Monday.
Meantime, spreads in the secondary market continued to trade wider following weakness earlier during the session.
The Markit CDX North American Investment Grade series 23 index eased 4 basis points to a spread of 71 bps at Monday’s close.
This followed news that Greece would close its banks this week and impose restrictions on ATM withdrawals after talks between the country and its creditors fell apart over the weekend.
In the primary sphere, sources are calling for a quiet summer week ahead of the July 4 holiday weekend, with around $10 billion forecasted.
“Things are slowing down,” one market source noted.
Heinz bonds firm
In other secondary news, tranches of H.J. Heinz Co.’s recently priced $10 billion seven-part bond offering (Baa3/BBB-/) traded mostly tighter early Monday, according to a market source.
The Pittsburgh-based food processing company’s $1 billion of 1.6% two-year notes were around 3 bps tighter at 92 bps bid, 90 bps offered.
The notes sold with a spread of Treasuries plus 95 bps on Tuesday.
The company’s $1.5 billion of 2% three-year notes were quoted at 95 bps offered after pricing with a spread of 100 bps over Treasuries.
The company’s $1.5 billion of 2.8% five-year notes, which sold with a spread of Treasuries plus 115 bps, were 2 bps tighter at 109 bps offered.
A $2 billion 3.95% 10-year note traded 2 bps better at 154 bps bid, 152 bps offered. The notes sold with a spread of Treasuries plus 155 bps.
A $1 billion 5% 20-year note was quoted at 176 bps offered after pricing with a spread of Treasuries plus 185 bps.
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