High-grade market quiet ahead of holiday; week’s supply tops expectations; Oracle firms

By Cristal Cody and Aleesia Forni

Virginia Beach, July 3 – The high-grade market was muted on Thursday as the market closed early ahead of Friday’s Independence Day holiday.

Players were focused on the release of the June jobs report during the session.

The Labor Department reported that total nonfarm payroll employment increased by 288,000 in the month of June.

Additionally, the U.S. unemployment rate fell 0.2% to 6.1% during the month, the lowest since September 2008.

The shortened week saw $19 billion of investment-grade paper price in three sessions.

The $10 billion megadeal priced by Oracle Corp. on Monday helped boost the week’s supply above what sources had predicted to be around a $15 billion week.

Primary activity is expected to resume in the week ahead, with around $15 billion to $20 billion of high-grade paper expected to price.

Desks emptied and trading activity was light over the short session on Thursday, according to market sources.

“Very quiet,” one source said.

In the secondary market, Oracle’s 4.3% senior notes due 2034 (A1/A+/A+) traded nearly 10 basis points tighter, according to a market source.

Oracle firms

Oracle’s 4.3% notes due 2034 tightened to 86 bps offered, a source said early Thursday.

In late afternoon trading, the notes rose to 100.43 from 99.84 on Wednesday, according to a market source.

Oracle sold $1.75 billion of the 20-year notes at Treasuries plus 95 bps, or 99.96, to yield 4.303%, on Monday as part of a $10 billion seven-part offering.

The computer software and technology company is based in Redwood City, Calif.

Bank/brokerage CDS costs lower

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

Bank of America Corp.’s CDS costs firmed 2 bps to 64 bps bid, 68 bps offered. Citigroup Inc.’s CDS costs tightened 2 bps to 61 bps bid, 65 bps offered. JPMorgan Chase & Co.’s CDS costs firmed 3 bps to 52 bps bid, 56 bps offered. Wells Fargo & Co.’s CDS costs declined 2 bps to 39 bps bid, 43 bps offered.

Merrill Lynch’s CDS costs firmed 2 bps to 67 bps bid, 72 bps offered. Morgan Stanley’s CDS costs tightened 2 bps to 63 bps bid, 67 bps offered. Goldman Sachs Group, Inc.’s CDS costs declined 2 bps to 69 bps bid, 73 bps offered.

Paul Deckelman contributed to this review.

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