No new deals, as market focuses on FOMC; HSBC, Enel issues better in trading

By Aleesia Forni

Virginia Beach, Sept. 18 - The high-grade bond market was empty of new deals on Wednesday, as the market was focused on the statements released from the Federal Reserve, which stunned players when it announced it would continue its bond purchasing program.

The surprise decision will likely urge issuers to bring new deals in the coming weeks, continuing the year's trend of a packed primary market.

"Expecting it to be busy," one syndicate source said of the primary market following the Fed's decision.

He added that the current market, especially following the Fed's decision on Wednesday, would be a "great time" for issuers to head to the primary.

Though the session saw no new issues on Wednesday, Toyota Motor Credit Corp. detailed its recent $350 million offering of floating-rate notes due 2015.

The notes priced at Libor plus 15 basis points.

Investment-grade bonds ended the day stronger, trading 2 bps to 5 bps tighter in general after the Federal Reserve announced it would maintain its $85 billion a month purchases of Treasuries and mortgage-backed securities, a trader said.

"There has been a lot of account-buying activity following the announcement," the trader said.

The Markit CDX Series 20 North American Investment Grade index tightened 4 bps to a spread of 69 bps on Wednesday.

HSBC USA Inc.'s 2.625% notes due 2018 traded another 3 bps tighter going out from the morning session, according to traders.

Enel SpA's 8.75% senior subordinated notes due 2073 (Ba1/BB+/BBB-) continued to rise in trading over the session, while SLM Corp.'s 5.5% notes due 2019 edged higher, one trader said.

Toyota details floater sale

Toyota priced a $350 million offering of floating-rate notes due Sept. 18, 2015 at par to yield Libor plus 15 bps, according to an FWP filing with the Securities and Exchange Commission.

Cabrera Capital Markets, LLC, CastleOak Securities, LP, Citigroup Global Markets Inc., Drexel Hamilton, LLC, Muriel Siebert & Co., Inc. and Toussaint Capital Partners LLC were the joint bookrunners.

The U.S. funding arm of Toyota is based in Torrance, Calif.

HSBC notes firm

HSBC USA's 2.625% notes due 2018 (A2/A+/AA-) narrowed in secondary trading over Wednesday to 94 bps bid, 91 bps offered, tighter than where the notes were quoted at 97 bps bid, 95 bps offered earlier Wednesday, according to traders.

One trader saw the notes at 94 bps bid, 93 bps offered in late afternoon trading.

HSBC sold $750 million of the five-year notes with a spread of Treasuries plus 105 bps on Tuesday.

The financial services company is based in London.

Enel trades higher

Enel's 8.75% senior subordinated notes due 2073 climbed to 102.75 bid, 103.375 offered going out on Wednesday, a trader said.

The notes were quoted by a source at another desk earlier in the day at 101.625 bid, 101.75 offered.

Enel, a Rome-based electric utility company, sold $1.25 billion of the notes at 99.183 to yield 8.875% on Tuesday.

SLM better

In other secondary market action, SLM's 5.5% notes (Ba1/BBB-/BB+) due Jan. 15, 2019 traded at 99.875 bid, 100.125 offered late afternoon on Wednesday, according to a trader.

The notes (Ba1/BBB-/BB+) were quoted earlier in the session at 99.5 bid, 99.75 offered.

The Newark, Del.-based provider of education loans sold $1.25 billion of the notes at 98.877 to yield 5.75% on Tuesday.

Bank/brokerage CDS costs tight

Investment-grade bank and brokerage CDS costs tightened on Wednesday, according to a market source.

Bank of America Corp.'s CDS costs firmed 5 bps to 93 bps bid, 97 bps offered. Citigroup Inc.'s CDS costs tightened 5 bps to 84 bps bid, 88 bps offered. JPMorgan Chase & Co.'s CDS costs declined 4 bps to 76 bps bid, 80 bps offered. Wells Fargo & Co.'s CDS costs firmed 3 bps to 54 bps bid, 58 bps offered.

Merrill Lynch's CDS costs tightened 7 bps to 86 bps bid, 91 bps offered. Morgan Stanley's CDS closed 5 bps tighter at 122 bps bid, 127 bps offered. Goldman Sachs Group, Inc.'s CDS costs declined 6 bps to 113 bps bid, 117 bps offered.

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