Primary muted as market players focus on payrolls data; Comcast, Time Warner Cable rise

By Cristal Cody and Aleesia Forni

Virginia Beach, April 4 - The high-grade bond market's week wrapped with no new issues priced during Friday's session, as players focused on the all-important nonfarm payrolls data.

The Labor Department reported that the U.S. economy added 192,000 jobs in March, close to expectations of 200,000.

The unemployment rate was unchanged at 6.7%.

Also on Friday, International Bank for Reconstruction and Development (World Bank) detailed its $2.25 billion sale of 1.375% four-year notes, which priced with a spread of mid-swaps minus 1 basis point, or Treasuries plus 56.5 bps.

The market saw roughly $14.4 billion of new issuance price during a relatively muted week, with the total falling just short of earlier expectations of a $15 billion week.

Activity in the market is expected to pick up somewhat in the week ahead, with one source noting that the primary "could see around $20 billion" of new issuance.

In the secondary market, Comcast Corp.'s 4.75% senior notes due 2044 and Time Warner Cable Inc.'s 4.125% notes due 2021 traded better on the day, according to market sources.

World Bank upsizes

International Bank for Reconstruction and Development (World Bank) sold $2.25 billion of 1.375% four-year notes (Aaa/AAA/) with a spread of mid-swaps minus 1 bp, or Treasuries plus 56.5 bps, according to a market source and a company release.

The deal was upsized from $1 billion.

"We saw that there was an opportunity to do a [U.S.-dollar] transaction at this maturity and are very pleased with the strong demand - seeing orders more than double our initial target - principally from our core investor base," George Richardson, head of Capital Markets, World Bank Treasury, said in a press release.

"We're grateful for the support we get from our investors and bank partners for the World Bank's development mandate and the demonstration that investors continue to value the safety of the World Bank."

The deal received 65% of its orders from Asia, while another 14% came from Europe, 12% from the Americas and 9% from the Middle East and Africa.

Central banks and office institutions picked up 86%, fund managers 11% and banks and corporates 3%.

Pricing was at 99.621 to yield 1.473%.

Citigroup Global Markets Inc., Goldman Sachs & Co. and Deutsche Bank Securities Inc. were the joint bookrunners.

The issuer is based in Washington, D.C.

Comcast better

Comcast's 4.75% senior notes due 2044 ended higher on Friday at 102.02 from 101.31 in the previous session, a source said.

Comcast sold $1 billion of the bonds (A3/A-/A-) on Feb. 19 at 99.114 to yield 4.806%.

The media, technology and entertainment company is based in Philadelphia.

Time Warner Cable rises

Time Warner Cable's 4.125% notes due 2021 rose to 104.86 from 103.5 on Thursday, according to a market source.

The company sold $700 million of the notes (Baa2/BBB/BBB) in 2010 at 99.369 to yield 4.202%.

The notes traded in the 95.5 area in early February before Time Warner Cable announced that it will merge with Comcast.

The broadband communications company is based in New York City.

Bank/brokerage CDS unchanged

Investment-grade bank and brokerage CDS prices were unchanged, according to a market source.

Bank of America Corp.'s CDS costs were flat at 63 bps bid, 66 bps offered. Citigroup Inc.'s CDS costs were unchanged at 73 bps bid, 76 bps offered. JPMorgan Chase & Co.'s CDS costs ended flat at 56 bps bid, 59 bps offered. Wells Fargo & Co.'s CDS costs were flat at 35 bps bid, 38 bps offered.

Merrill Lynch's CDS costs closed unchanged at 69 bps bid, 72 bps offered. Morgan Stanley's CDS costs were unchanged at 82 bps bid, 85 bps offered. Goldman Sachs Group, Inc.'s CDS costs ended flat at 88 bps bid, 91 bps offered.

Paul Deckelman contributed to this review.

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