Steady supply forecast for week ahead; Bank of America, Kroger firm; Wells Fargo mostly flat

By Cristal Cody

Tupelo, Miss., July 21 – Activity in the high-grade bond market stayed quiet on Friday following strong bank and financial issuance over the week from issuers including Morgan Stanley, Goldman Sachs Group Inc., Bank of America Corp., Mitsubishi UFJ Financial Group, Inc., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.

More than $40 billion of bonds priced in the first four sessions.

Market sources expect lower supply in the week ahead of about $20 billion to $25 billion with the Federal Reserve’s monetary policy meeting scheduled midweek.

In the secondary market, new bank and financial paper traded mostly flat to modestly tighter.

Bank of America’s $7 billion of senior notes (Baa1/BBB+/A) sold in four tranches on Tuesday tightened about 2 basis points to 5 bps.

Wells Fargo’s 2.625% senior notes due July 22, 2022 brought to market on Monday in a $3.75 billion deal traded mostly flat.

Kroger Co.’s $1.5 billion three-part offering of senior notes (Baa1/BBB/BBB) traded about 4 bps to 5 bps tighter in the secondary market.

The Markit CDX North American Investment Grade index ended Friday mostly unchanged at a spread of 57 bps.

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