Investment-grade primary issuance halts; Freddie passes; Home Depot, Citigroup, AT&T weaken

By Aleesia Forni and Cristal Cody

New York, Feb. 9 – Another tumultuous session kept the investment-grade primary market empty of any new issuance on Tuesday, while credit spreads were largely wider during the trading day ahead of Federal Reserve chair Janet Yellen’s testimony in Congress on Wednesday morning.

Meantime, Freddie Mac announced that it would forgo issuing Reference Notes on its Feb. 9 announcement date.

A source noted that any issuance activity for the remainder of the week was “a tough call” due to the ongoing rocky market backdrop.

So far, only one deal has priced this week. Ford Motor Credit Co. LLC issued $115 million of notes in three parts on Monday.

Most sources had called for around $10 billion to $15 billion of new investment-grade paper to price during the week.

In the secondary market, Home Depot Inc.’s senior notes (A2/A/A) traded mostly weaker on Tuesday.

Citigroup Inc.’s 3.7% subordinated notes due 2026 eased 3 basis points.

AT&T Inc.’s new notes (Baa1/BBB+/A-) widened about 5 bps to 10 bps.

The Markit CDX North American Investment Grade index closed 1 bp softer at a spread of 121 bps.

Home Depot softens

Home Depot’s 3% notes due April 1, 2026 eased 5 bps to 116 bps bid over the day, a market source said.

The company sold $1.3 billion of the 3% notes on Feb. 3 at a spread of 120 bps plus Treasuries.

Home Depot’s 4.25% notes due 2046 traded 2 bps softer at 147 bps bid on Tuesday.

The bonds priced in a $350 million tranche at Treasuries plus 150 bps in the Feb. 3 offering.

Home Depot is an Atlanta-based home improvement retailer.

Citigroup eases

Citigroup’s 3.7% subordinated notes due 2026 eased 3 bps to 199 bps bid on Tuesday, according to a market source.

Citigroup sold $2 billion of the notes (Baa1/BBB+/A) on Jan. 5 at a spread of Treasuries plus 148 bps.

The financial services company is based in New York.

AT&T widens

AT&T’s 4.125% notes due 2026 eased 5 bps to 227 bps bid in secondary trading, a market source said.

The company sold $1.75 billion of the notes (Baa1/BBB+/A-) on Jan. 29 at Treasuries plus 220 bps.

AT&T’s 5.65% bonds due 2047 widened 10 bps over the session to 303 bps bid.

The company sold $1.5 billion of the bonds in the Jan. 29 deal at Treasuries plus 290 bps.

AT&T is a Dallas-based telecommunications company.

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