High-grade supply quiet after strong issuance; lighter volume eyed; Pacific Gas mostly widens

By Cristal Cody

Tupelo, Miss., June 19 – Investment-grade supply quieted over Friday’s session following nearly $60 billion of deal volume for the week.

Supply was led by multiple-tranche bond offerings from issuers including T-Mobile U.S. Inc. subsidiary T-Mobile USA, Inc. on Thursday, Upjohn Inc. on Wednesday and Pacific Gas and Electric Co. on Tuesday.

Volume beat market forecasts of about $20 billion to as much as $40 billion for the week.

Looking ahead to next week, pricing action is expected to slow to about $25 billion of issuance.

High-grade credit spreads continued to widen Friday after tightening about 10 basis points in the first two sessions of the week.

The Markit CDX North American Investment Grade 33 index softened nearly 4 bps to a spread of 77.95 bps.

New issues priced this week were mixed with Pacific Gas and Electric’s bonds mostly weaker in heavy secondary trading, sources said.

Pacific Gas and Electric’s $8,925,000,000 of first mortgage bonds priced in six tranches on Tuesday as part of its reorganization funding from Chapter 11 bankruptcy widened about 12 bps to 20 bps across most of the tranches.

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