High-grade primary quiet with focus on year-end activities; Walt Disney mixed; Microsoft firms

By Cristal Cody

Eureka Springs, Ark., Dec. 20 – Investment-grade bond market activity continues to slow ahead of the Christmas holiday and final week of 2016, with little activity reported on Tuesday.

“Wrapping up doing some year-end things and getting ready for the next year,” one syndicate source said of the session.

No additional bond issuance is expected until 2017, but the first two weeks of the new year “should be probably pretty busy,” the source said.

The bond markets will close early on Friday and will be closed on Monday for the Christmas holiday.

The Markit CDX North American Investment Grade index closed the day about 1 basis point tighter at a spread of 67 bps.

The three-month Libor yield rose 1 bp to hit 100 bps on Tuesday.

Walt Disney Co.’s notes (A2/A/A) were active but mixed in secondary trading. The company’s long bonds were 6 bps tighter over the day.

Microsoft Corp.’s 2.4% senior notes due 2026 traded 3 bps better during the session.

Wells Fargo Bank NA’s 1.8% notes due 2018 that priced at the start of the month were seen trading nearly 10 bps tighter than issuance earlier in the session.

Disney long bonds firm

Walt Disney’s 1.85% notes due 2026 eased about 1 bp on Tuesday to 65 bps bid, according to a market source.

The company sold $1 billion of the notes on July 7 at a spread of Treasuries plus 70 bps.

Walt Disney’s 3% bonds due 2046 tightened 6 bps during the session to head out at 87 bps bid.

The company sold $500 million of the notes in the July 7 sale at a spread of 105 bps over Treasuries.

Walt Disney is a Burbank, Calif.-based entertainment and media company.

Microsoft improves

Microsoft’s 2.4% notes due 2026 firmed 3 bps to 67 bps bid in secondary trading on Tuesday, a source said.

The company sold $4 billion of the 10-year notes (Aaa/AAA/) on Aug. 1 at a spread of 90 bps plus Treasuries.

The computer software company is based in Redmond, Wash.

Wells Fargo Bank better

Wells Fargo Bank’s 1.8% notes due 2018 were seen in early secondary trading at 61 bps offered, according to a market source.

Wells Fargo Bank (Aa2/AA-/AA) sold $800 million of the two-year notes on Dec. 1 at a spread of 70 bps.

The bank is a subsidiary of San Francisco-based Wells Fargo & Co.

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