Financials rush primary to close week; spreads tighten in secondary; GE Capital widens

By Aleesia Forni

New York, Jan. 22 – Morgan Stanley, Wells Fargo Bank NA, Royal Bank of Canada and TransCanada PipeLines Ltd. entered the primary market on Friday, taking advantage of more positive market conditions at the week’s close.

Morgan Stanley sold the day’s largest offering, pricing $5.5 billion of notes in three parts, all inside price guidance.

The sale includes $2 billion of 2.45% three-year notes sold at 99.933 to yield 2.473%, $500 million of three-year notes sold at par to yield Libor plus 137.5 bps and a $3 billion 3.875% 10-year tranche of notes sold at 99.795 to yield 3.9%.

Wells Fargo attracted an order book that was around 1.5 times oversubscribed, and RBC sold $1.5 billion of 10-year contingent capital subordinated notes.

TransCanada sold Friday’s lone non-financial deal, offering a $1.25 billion new issue.

The market’s tone was “definitely a little better” on Friday, one market source noted, allowing the issuers to access the market to close out a volatile week.

In the secondary market, bonds from General Electric Capital Corp. traded wider after the company announced stronger-than-expected earnings but a decline in revenues.

High-grade credit spreads were tighter over the course of the session.

The Markit CDX North American Investment Grade 25 index firmed 4 basis points to a spread of 105 bps.

Lipper US Fund Flows reported an outflow of $442 million from corporate investment-grade bond funds for the week ended Jan. 13.

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