Week’s new issuance beats expectations; spreads edge wider; Verizon bonds improve

By Cristal Cody and Aleesia Forni

Virginia Beach, July 25 – The high-grade bond market closed a mostly positive week on a quiet note on Friday.

The session saw no new deals hit the primary market.

Amid ongoing geopolitical tensions, the week’s new issuance managed to top earlier supply expectations.

The investment-grade primary market saw $18.35 billion of supply price this week, besting predictions of around a $15 billion week.

In other market news this week, Lipper reported inflows of $1.594 billion into corporate investment-grade funds for the week ended July 23, bringing the year-to-date total inflows to around $48 billion.

The previous week had seen $1.637 billion of inflows.

With the Federal Open Market Committee meeting on Tuesday and Wednesday, coupled with Friday’s jobs data, primary activity is likely to be measured in the week ahead.

Around $15 billion of paper is expected to price.

Investment-grade bond spreads edged wider over the day in light activity, according to market sources.

The Markit CDX North American Investment Grade series 22 index was unchanged at a spread of 59 basis points.

Investment-grade trading activity has been thin over the week with several desks lightly staffed due to vacations, a source said.

Verizon Communications Inc.’s bonds (Baa1/BBB+/A-) remained stronger in the secondary market following the company’s announcement it plans to exchange 11 issues for new debt, sources said.

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