Primary wraps $49 billion week; pace to continue next week; energy, oil bonds mostly unchanged

By Aleesia Forni and Cristal Cody

Virginia Beach, July 17 – The investment-grade bond market was quiet on Friday to close a hectic week for the primary that saw more than $49.5 billion of new issuance price.

The figure is roughly two times what market participants had expected to be around a $25 billion week.

Also, Lipper reported $267 million of inflows into corporate investment-grade funds for the week ended July 15, pushing the year-to-date total to more than $29 billion of inflows.

This follows the previous week’s $1.09 billion of inflows.

Another onslaught of issuance is expected for the week ahead, with merger and acquisitions and financial names continuing to lead the charge.

“Another busy one,” one source predicted.

Sources are calling for around $35 billion to $40 billion of new issuance.

ConocoPhillips Co.’s senior notes (A1/A/) traded flat to about 1 basis point weaker over the day. The company announced late Thursday a 1-cent per share increase in its quarterly dividend to 74 cents per share.

Marathon Oil Corp.’s senior notes (Baa1/BBB/) were unchanged on the day but 10 bps to 15 bps wider than issuance.

In other trading, Shell International Finance BV’s 2.125% notes due 2020 were mostly flat.

Southwestern Energy Co.’s senior notes (Baa3/BBB-/) were flat to wider on the day.

The Markit CDX North American Investment Grade series 23 index was unchanged to modestly tighter at a spread of 65 bps.

Celgene preps deal

Also on Friday, Celgene Corp. announced plans in an 8-K filing with the Securities and Exchange Commission to sell about $5 billion of senior notes to help finance its acquisition of Receptos, Inc.

It will also use cash on hand to fund the roughly $7.2 billion deal.

The Summit, N.J.-based global biopharmaceutical company also plans to offer $3 billion of senior notes for general corporate purposes.

ConocoPhillips steady

ConocoPhillips’ 2.2% notes due 2020 traded flat to 1 bp weaker at 69 bps bid, according to a market source.

ConocoPhillips sold $500 million of the notes on May 13 at 65 bps plus Treasuries.

The company’s 3.35% notes due 2025 were unchanged to 1 bp softer at 118 bps bid.

ConocoPhillips priced $500 million of the notes in the May 13 offering at Treasuries plus 110 bps.

The energy company is based in Houston.

Marathon Oil unchanged

Marathon Oil’s 3.85% notes due 2025 traded flat at 185 bps bid on Friday, a market source said.

The company sold $900 million of the notes on June 1 at Treasuries plus 170 bps.

Marathon Oil’s 5.2% bonds due 2045 were unchanged at 235 bps bid in the secondary market.

Marathon Oil sold $500 million of the bonds in the June 1 offering at a spread of Treasuries plus 225 bps.

The energy company is based in Houston.

Shell stable

Shell International Finance’s 2.125% notes due 2020 were mostly unchanged at 57 bps bid, according to a market source.

Shell sold $2 billion of the five-year notes (A1/AA/) on May 6 at a spread of Treasuries plus 60 bps.

The company is a subsidiary of the Hague, the Netherlands-based Royal Dutch Shell plc.

Southwestern Energy mixed

Southwestern Energy’s 4.05% notes due 2020 were unchanged at 176 bps bid, according to a market source.

The company sold $850 million of the notes on Jan. 20 at 278 bps plus Treasuries.

Southwestern Energy's 4.95% notes due 2025 headed out softer at 265 bps bid on Friday. The notes were seen trading on Wednesday at 258 bps bid, the source said.

The company sold $1 billion of the notes at 318 bps over Treasuries in the Jan. 20 offering.

The independent natural gas and oil company is based in Houston.

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