New deals likely done for 2011; GE Capital gives terms; Bank of America firms; AT&T flat

By Andrea Heisinger and Cristal Cody

New York, Dec. 21 - The high-grade bond market was empty on the primary side on Wednesday as the start of Hannukah contributed to the sluggish volume.

"Sorry to say, there's nothing happening," one syndicate source said, adding that desks have already thinned out ahead of the holidays.

"This is how it's going to be for the rest of the year," the source said.

General Electric Capital Corp. gave terms for its $75 million sale of hybrid notes priced on Tuesday. This brings the number of deals to the week to two, including Monday's split-rated sale from International Lease Finance Corp.

Corporate bond spreads were tighter overall in the thin markets on Wednesday. The Markit CDX Series 17 North American investment-grade index firmed 2 basis points to a spread of 125 bps.

Bank and financial paper traded "2 to 5 wider on the day, but off the earlier 'wides,' " a trader said.

Bank of America Corp.'s notes were among the exception and traded about 20 bps better.

Paper from Morgan Stanley and Toronto Dominion Bank was flat, sources said.

"Everything's rallied a little bit going into the close here, but it's light volume with the holidays," a trader said on Wednesday. "It's generally been quiet."

Overall trading volume fell to less than $7 billion on Wednesday.

Telecom paper, including AT&T, Inc., ended mostly unchanged after widening as much as 3 bps to 5 bps early in the day, a trader said.

In other trading, Kinross Gold Corp.'s bonds widened in the secondary market as gold prices slipped.

Treasuries ended lower on a poor seven-year note auction. The benchmark 10-year note yield rose to 1.97% from 1.92%. The 30-year bond yield ended up 7 bps to 3%.

GE Capital gives terms

General Electric Capital sold $75 million of three-year fixed-to-floating-rate notes, according to an FWP with the Securities and Exchange Commission.

The notes have a coupon of 1.5% with a price of par to yield 1.5% from Dec. 29 up to Dec. 29, 2012. After that date, there is a floating-rate of Libor plus 80 basis points, paid quarterly.

Bookrunner was Barclays Capital Inc.

The funding arm of General Electric Co. is based in Norwalk, Conn.

Bank of America better

Bank of America's paper firmed in thin trading on Wednesday. The 5% notes due 2021 were trading 20 bps better at 460 bps bid, 440 bps offered, according to a trader.

The notes were sold on May 10 at a spread of 185 bps over Treasuries.

The financial services company is based in Charlotte, N.C.

Morgan Stanley flat

Morgan Stanley's 5.5% notes due 2021 traded unchanged at 510 bps bid, 495 bps offered on Wednesday, a trader said.

The notes were sold on July 21 at 250 bps over Treasuries.

The investment bank is based in New York City.

TD Bank unchanged

Elsewhere in the sector, Toronto-Dominion Bank's 2.375% senior medium-term notes due 2016 traded unchanged on the day at 138 bps bid, 128 bps offered, a trader said.

The bank sold $1.5 billion of the series A notes (Aaa/AA-) at 135 bps over Treasuries on Oct. 12.

The bank and financial services company is based in Toronto.

AT&T flat

In other trading on Wednesday, AT&T's bonds traded flat along with the telecom sector, according to a source.

The 3.875% notes due 2021 were quoted at 132 bps bid, 127 bps offered.

AT&T sold the 10-year notes at a spread of 160 bps over Treasuries on Aug. 15.

The telecommunications company is based in Dallas.

Kinross Gold weaker

Kinross Gold's senior notes (Baa3/BBB-/BBB-) widened this week, a trader said on Wednesday.

The 6.875% bonds due 2041 widened to 395 bps bid, 375 bps offered on Wednesday. The bonds priced at 315 bps plus Treasuries in a three-tranche $1 billion offering of senior notes (Baa3/BBB-/BBB-) on Aug. 16.

The tranche of 5.125% notes due 2021 were quoted on Tuesday wider at 375 bps bid, 355 bps offered. The 10-year notes priced at a spread of 290 bps over Treasuries.

"Not the most liquid thing in the world," the trader said.

The mining and gold ore processing company is based in Toronto.

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