Week ends with little issuance, but uptick seen ahead; secondary spreads tighten to wrap week

By Aleesia Forni and Andrea Heisinger

New York, April 19 - A little more than $8 billion of bonds was priced in the U.S. investment-grade market during the past week.

This was in the upper range of the $5 billion to $10 billion expected to price - a light load due to earnings blackouts and a general lack of supply.

The coming week should see an uptick in issuance.

"You're seeing companies moving out of blackout," one market source said. "Financials seem to be a trend - we moved out of REITs and into banks starting to tap the market again."

Between $10 billion and $15 billion of supply is in the pipeline for the coming week, not necessarily heavily weighted to financial names, a syndicate source said.

"Haven't heard of any financials on the slate, but we have three or four trades planned," the source said.

"That doesn't mean there aren't any financials that are going to price, but they usually move pretty quickly. We have a couple of deals that aren't really opportunistic but have been planning ahead."

Spreads in the secondary market were trading tighter overall to close the week, traders noted.

One source noted new issues were "holding up pretty well" during the session.

AutoZone, Inc.'s recent $500 million issue of 10-year senior notes was quoted 2 basis points wider compared to levels seen at another desk earlier during the day's trading.

The 3.125% notes were quoted at 149 bps bid, 144 bps offered following Thursday's pricing at a spread of Treasuries plus 150 bps.

AutoZone is a Memphis-based automotive parts retailer.

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