Up to $10 billion of new bonds seen in coming week before year-end wind-down; Teva notes firm

By Aleesia Forni and Andrea Heisinger

New York, Dec. 14 - Volume in the high-grade primary market is set to drop in the coming week, sources said, as companies try to get business done prior to the end of 2012.

Between $5 billion and $10 billion in supply is expected, with possibly "a couple of benchmark sales," a syndicate source said, referring to sales of $500 million or more in size.

"We're hearing up to $10 [billion], although some are saying zero to $5 [billion]," a source said late in the afternoon.

She added that the current trend of issuers coming mostly from the industrial sector - with little financial issuance - will continue in the coming week.

"Should be OK the first couple of days, then probably not much," the source said of issuance flow.

The Markit CDX Series 18 North American Investment Grade index widened 1 bp to a spread of 95 bps on Thursday.

Thursday's issuances from Teva Pharmaceutical Finance IV LLC and Teva Pharmaceutical Finance Co. BV were trading better during the session.

The $700 million tranche of 2.25% notes due 2020 sold by Teva Pharmaceutical Finance IV was quoted at 96 basis points offered.

The notes were priced with a spread of Treasuries plus 110 bps.

The $1.3 billion tranche of 2.95% 10-year notes priced by Teva Pharmaceutical Finance Co. was trading 5 bps better at 120 bps bid, 118 bps offered.

The Israel-based maker of generic and over-the-counter pharmaceuticals sold the notes with a spread of Treasuries plus 125 bps.

Of the day's dealings in the preferred stock market, SunTrust Banks Inc.'s new $450 million of 5.875% series E noncumulative perpetual preferreds freed from the syndicate in early Friday trading.

The deal priced on Thursday.

A trader said the preferreds were trading at $24.80 bid, $24.85 offered at midday. After the close, a market source said the issue was trading in a range of $24.75 to $24.78 in the last minutes of trading.

Stephanie N. Rotondo contributed to this review

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