Week’s high-grade bond supply meets estimates; primary slowdown ahead; Apple, AT&T tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 14 – Issuers weathered volatile market conditions this week to bring roughly $25.1 billion of new investment-grade bond issuance to the primary.

The week closed on Friday with no new deals pricing, keeping the week’s total in line with what was predicted to be a $25 billion week.

Meantime, Lipper reported outflows of $1.84 billion from corporate investment-grade funds this week, bringing the year-to-date inflows to $26.2 billion.

This follows last week’s outflows of $740 million.

Primary activity is expected to slow in the coming sessions, with around $10 billion of supply expected for the week ahead.

In the secondary market, Apple Inc.’s bonds (Aa1/AA+) traded 3 bps to 4 bps tighter on Friday.

Oracle Corp.’s senior notes (A1/AA-/A+) were mixed.

AT&T Inc.’s bonds (/BBB+/A-) headed out about 1 bp to 5 bps better in secondary trading.

Time Warner Inc.’s bonds (Baa2/BBB) improved about 1 bp during the session.

The Markit CDX North American Investment Grade index ended unchanged at a spread of 77 bps.

U.S. credit indices remain weak, Barclays Bank plc analysts said in a market note on Friday.

“Investment grade spreads have continued to widen amid generally benign U.S. economic data, negative macro news out of emerging markets, and an extremely active primary issuance market and are now 39 [bps] off of year-to-date tights,” the note said.

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