New deals seen light in coming week; new Avery Dennison, Boston Properties notes up again

By Andrea Heisinger and Cristal Cody

New York, April 9 - New deals abandoned the high-grade bond market on Friday, despite no real changes to the market tone.

A source had said late the previous day that there wasn't much supply left on the calendar.

Two deals remain on the forward calendar, which are expected to price early in the coming week following road shows and launches.

Issuance is expected to be fairly light, despite desks being more fully staffed.

In secondary trading, the new notes from Avery Dennison Corp. and Boston Properties Corp. continued to firm on Friday, a source said.

But Friday mostly was a "very quiet day," in trading, a source told Prospect News.

Overall Trace volume clocked in at only about $8 billion, down about 26% from Thursday, according to a source.

In addition on Friday, the CDX Series 14 North American high-grade index tightened 1 bp to a mid bid-asked spread level of 86 bps, a market source said.

Elsewhere, U.S. Treasuries were flat to slightly stronger on Friday.

The yield on the 5-year Treasury note was unchanged at 2.63%, while the yield on the 10-year benchmark Treasury note firmed 1 bp to 3.88% and the yield on the 30-year Treasury bond tightened 1 bp to 4.74%.

Desks see low volume ahead

There could be "a couple of busy days" in the week ahead, a market source said late on Friday.

Another source wasn't much more enthusiastic, saying that new deals were "light for us next week. It could be big - who knows?"

When asked where all the deals were hiding, and why more issuers wouldn't be coming to market, the source said "we've had a lot of supply already this year."

The number of deals is expected to be on par with the past week's, although it's unclear if there will be any large, big-name deals.

"It depends on what happens [this weekend] with Greece," a market source said. It's possible a bailout package could be decided on in that time.

The uncertainty will likely mean a slow start to the week on Monday.

Deals on tap for coming week

There are two deals on tap for the coming week, following road shows.

Southern Copper Corp. announced a sale of senior unsecured notes (Baa2/BBB-/BBB) in two tranches, a market source said.

The deal has maturities in 2020 and 2040.

It is expected to price following a road show running from April 8 to 12.

Bookrunners are Credit Suisse Securities, Goldman Sachs & Co. and Morgan Stanley & Co.

Proceeds are being used for general corporate purposes, including financing capital expenditures.

The copper producer has operations in Peru, Chile and Mexico and is based in Phoenix.

Also expected is a deal from International Finance Corp., which had not priced as of press time Friday afternoon.

The business lender in developing countries announced an upcoming sale of five-year global notes (Aaa/AAA), a market source said at the top of the week.

Timing for the sale was expected either Friday or early in the coming week. It was in "very preliminary" stages, the source said when the deal was announced on Monday, with no size or guidance decided.

Deutsche Bank Securities, HSBC Securities and UBS Investment Bank are on the books.

The lender is based in Washington, D.C.

Avery Dennison tighter

Avery Dennison's new 5.375% notes (Baa2/BBB) due 2020 traded tighter on Friday at 140 bps offered, according to a source.

The company priced $250 million of the notes on Thursday at Treasuries plus 150 bps. Later that day, the 10-year notes were seen trading in the secondary at 144 bps bid, 141 bps offered.

Avery Dennison is an office products and branding company based in Pasadena, Calif.

Boston Properties firms 3 bps

Meanwhile in trading, the 5.625% notes due 2020 priced from Boston Properties on Thursday were stronger on Friday, according to a source.

The notes were quoted late in the day at 172 bps bid, 171 bps offered.

On Thursday, the 10-year notes priced at Treasuries plus 175 bps and traded in the secondary at 177 bps bid, 171 bps offered, a source said.

The real estate investment trust for office properties is based in Boston.

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