Muted session ends $30 billion week; Total Capital, GE Capital firm; Hewlett-Packard flat

By Cristal Cody and Aleesia Forni

Virginia Beach, Jan. 10 - The high-grade market was muted on Friday amidst the release of weaker-than-expected U.S. jobs data.

The quiet session ended a week that saw a flurry of activity in the investment-grade primary.

The first full week of 2014 saw more than $30 billion of high-grade supply, and sources are not expecting activity to slow down anytime soon.

Around $20 billion to $25 billion of supply is expected for the week ahead.

"We could maybe see $100 billion for the month [of January]," one market source said.

In the Canadian primary market, more bank deposit note issuance is expected in the weeks ahead following Bank of Nova Scotia's C$1.5 billion offering of 3.27% seven-year deposit notes on Tuesday and Canadian Western Bank's C$300 million offering of 3.077% five-year senior deposit notes on Thursday, according to an informed source.

"There's a pretty broad expectation that banks will be busy with deposit notes, senior unsecured," the source said.

Investment-grade bond spreads tightened over the afternoon on Friday, according to market sources.

The Markit CDX North American Investment Grade series 21 index firmed 1 basis point to a spread of 64 bps.

"Spreads are in a little bit," one source said. "Volume is $9.8 billion - not bad for a Friday."

In the secondary market, Total Capital International's 2.125% notes due 2019 firmed 2 bps over the session, a trader said.

General Electric Capital Corp.'s 2.3% notes due 2019 have tightened since the issue priced on Wednesday, according to a trader.

Hewlett-Packard Co.'s 2.75% notes due 2019 traded flat on Friday, according to a trader.

Mondelez International Inc.'s 2.25% notes due 2019 tightened on the offered side in light trading action, a trader said.

Total Capital firms

Total Capital International's 2.125% notes due 2019 (Aa1/AA-/) traded in a "locked market" at 43 bps bid, 43 bps offered on Friday, a trader said.

The notes were quoted on Thursday at 45 bps bid, 43 bps offered.

Total Capital, a wholly owned subsidiary of Courbevoie, France-based Total SA, sold $750 million of the five-year notes at 45 bps over Treasuries on Wednesday.

GE Capital tightens

General Electric Capital's new 2.3% notes due 2019 (A1/AA+/) tightened to 53 bps bid on Friday, a trader said.

General Electric Capital sold $1 billion of the five-year notes with a spread of Treasuries plus 57 bps on Wednesday.

Norwalk, Conn.-based General Electric Capital is the funding arm of General Electric Co.

Hewlett-Packard flat

Hewlett-Packard's 2.75% notes due 2019 notes (Baa1/BBB+/A-) headed out at 95 bps offered on Friday, a trader said.

The issue traded in the aftermarket on Thursday at 96 bps bid, 95 bps offered.

Hewlett-Packard sold $1.25 billion of the notes on Thursday with a spread of Treasuries plus 102 bps.

The computer and technology company is based in Palo Alto, Calif.

Trading light in Mondelez paper

A $1 million block of Mondelez International's 2.25% notes due 2019 (Baa1/BBB-/BBB) was offered at 41 bps on Friday, a trader said.

The notes traded late on Thursday at 60 bps bid, 56 bps offered.

Mondelez sold $850 million of the five-year notes at Treasuries plus 60 bps.

Mondelez, formerly Kraft Foods Inc., is a snack company based in Deerfield, Ill.

CDS costs mostly lower

Investment-grade bank and brokerage credit default swap prices were unchanged to lower, according to a market source.

Bank of America Corp.'s CDS costs firmed 1 bp to 76 bps bid, 79 bps offered. Citigroup Inc.'s CDS costs were 1 bp tighter at 69 bps bid, 72 bps offered. JPMorgan Chase & Co.'s CDS costs ended 1 bp tighter at 66 bps bid, 69 bps offered. Wells Fargo & Co.'s CDS costs were unchanged at 39 bps bid, 42 bps offered.

Merrill Lynch's CDS costs firmed 1 bp to 78 bps bid, 84 bps offered. Morgan Stanley's CDS costs firmed 1 bp to 86 bps bid, 89 bps offered. Goldman Sachs Group Inc.'s CDS costs were flat at 91 bps bid, 94 bps offered.

Stephanie N. Rotondo contributed to this report

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