Lighter high-grade deal action forecast; Morgan Stanley firms; U.S. Bancorp mostly unchanged

By Cristal Cody

Eureka Springs, Ark., Jan. 20 – The high-grade bond markets stayed mostly quiet on Friday with the focus on the inauguration of president-elect Donald Trump and market reactions.

Primary action is expected to slow in the week ahead following robust supply month to date. Market sources forecast about $15 billion to $25 billion of investment-grade bond issuance in the upcoming week.

Smithfield Foods, Inc. announced plans on Friday to price a $1.4 billion offering of senior notes.

The private Rule 144A- and Regulation S-eligible notes (/BBB-/BBB) will be issued in tranches due 2020, 2022 and 2027.

In secondary trading, Morgan Stanley’s notes (A3/BBB+/A) headed out better than issuance on Friday, with the long bond trading nearly 10 basis points tighter than where it came.

Morgan Stanley’s 3.625% notes due 2027 were quoted at 140 bps bid, 137 bps offered, according to a market source.

Morgan Stanley’s 4.375% notes due 2047 traded tighter at 139 bps bid, 137 bps offered.

U.S. Bancorp’s 2.625% notes due 2022 traded flat on the bid side on Friday at 70 bps bid, 68 bps offered, a source said.

The Markit CDX North American Investment Grade index closed mostly unchanged at a spread of 66 bps.

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