New deal drought continues, moderate issuance in coming week; Citi short paper strong

By Andrea Heisinger and Cristal Cody

New York, April 23 - New bonds took a break from the market to end the week Friday, after a few mostly productive days.

It wasn't that the tone slipped much from Thursday, a source said at the end of the day, but that supply was absent and many were looking ahead to the coming week.

Although it's unclear if there will be new deals off the bat on Monday, it's expected to be a "moderate" week of issuance as more companies and financials emerge from earnings blackouts.

The coming week is expected to look similar to the past one in terms of the number of deals, sources said.

"We're not looking at anything too crazy," one syndicate source said.

"I know we have a few [sales] next week," one market source said. "Nothing's nailed down yet. Some of them will come earlier in the week."

Another source at a smaller desk said his calendar looked "moderate" and "a lot like this week."

There have not been any upcoming sales announced, but it's expected that Tuesday will be one of the busiest days of the coming week.

In secondary trading, financials were mixed with Citigroup Inc.'s short paper trading about 8 bps tighter, while Goldman Sachs Group Inc.'s notes moved out on Friday, according to sources.

Also in trading, interest remains highs in industrials, but the sector was mostly flat to slightly weaker, sources said.

Overall Trace volume dropped more than 25% to about $9.5 billion, according to a source.

The CDX Series 14 North American high-grade index was unchanged at a mid bid-asked spread level of 89 bps, according to a market source.

Treasuries ended the week slightly weaker.

On Friday, the yield on the 10-year benchmark Treasury note widened 4 bps to 3.81%. In addition, the yield on the 30-year Treasury bond eased 2 bps to 4.66%.

Dow mixed in trading

Although a trader "heard there was a lot of interest in industrial paper" on Thursday, industrials were mixed on Friday, according to sources.

For example, Dow Chemical Co.'s 7.6% notes due 2014 closed 5 bps wider at 105 bps. Meanwhile, Dow Chemical's 8.55% notes due 2019 firmed 3 bps to 172 bps.

Dow Chemical is a Midland, Mich.-based chemical and plastics manufacturer.

Elsewhere in the sector, ArcelorMittal's 9.85% notes due 2019 were unchanged at 180 bps on Friday, a source said.

Luxembourg-based ArcelorMittal is the world's leading steel company.

Financials mixed

Financials remained mixed in secondary trading on Friday a week after the Securities and Exchange Commission filed fraud charges against Goldman regarding its disclosure of information to investors, according to sources.

Goldman's outstanding bonds continued to weaken on Friday. Goldman's 7.5% notes due 2019 widened to 203 bps in trading late Friday from 188 bps on Thursday, the source said.

Goldman's 5.375% notes due 2020 were seen early Friday 26 bps wider at 186 bps.

Also, New York-based Goldman's 6.15% notes due 2018 widened to 176 bps versus 169 bps the previous day.

Charlotte, N.C.-based Bank of America's 7.625% notes due 2019 also weakened on Friday and were last seen trading 5 bps wider at 191 bps, according to a source.

Bank of America's 6.5% notes due 2016 widened 9 bps to 136 bps over Treasuries on Friday.

Meanwhile, New York-based Citigroup's paper was mostly unchanged on Friday, but its short paper was seen tighter, a source said.

Citigroup's 6.375% notes due 2016 were quoted 8 bps tighter at 180 bps.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.