KfW brings $4 billion; Fannie Mae prices; spreads hold tight; corporates take holiday break

By Cristal Cody

Tupelo, Miss., July 3 – Two high-grade issuers in the sovereign, supranational and agency markets priced new notes ahead of the early market close on Wednesday.

KfW priced a $4 billion offering of three-year guaranteed global notes tighter than initial talk.

Fannie Mae sold $2 billion of 1.75% Benchmark notes due July 2, 2024 at 99.621 to yield 1.83%, or a spread of 9 basis points over Treasuries, early Wednesday.

The U.S. bond markets closed at 2 p.m. ET and will reopen on Friday following the Independence Day holiday.

The Markit CDX North American Investment Grade 32 index tightened modestly over the shortened session to close at a spread of 52 bps. Credit spreads firmed more than 2 bps over the previous two sessions.

Meanwhile, the week is on track to see zero corporate supply with no deals priced week to date and none expected on Friday after the holiday, sources report.

Market sources had predicted a light week and forecasted zero up to about $5 billion of supply.

Looking ahead to next week, syndicate sources said they expect deal volume to surge to about $15 billion to $20 billion with the potential for more.

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