Primary’s pace to continue next week; credit spreads firm; Exxon Mobil bonds soft

By Aleesia Forni and Cristal Cody

Virginia Beach, May 8 – Market players are gearing up for another active week of issuance ahead following this week’s frenzy of issuance.

Large trades from AbbVie Inc., Apple Inc. and Shell International Finance BV helped push the week’s total supply to more than $50 billion.

This figure topped what sources had predicted to be a $35 billion to $40 billion week.

With a large M&A calendar expected for the remainder of May, sources are expecting the pace of the primary to continue, with another $35 billion of new issuance predicted for the week ahead.

Meantime, Lipper reported outflows of $531.1 million from corporate investment-grade funds for the week ending May 6.

This follows last week’s $1.528 billion of inflows and puts the year-to-date total to roughly $27.15 billion of inflows.

Investment-grade bonds and credit spreads mostly improved on the day following stronger economic data, sources said.

The Labor Department announced that non-farm payroll employment rose 223,000 in April, below the 228,000 forecast. The unemployment rate fell as expected to 5.4% from 5.5%.

The Markit CDX North American Investment Grade series 23 index firmed 3 basis points to a spread of 63 bps.

Bank and financial paper was mostly flat to modestly better in secondary trading.

Bank of America Corp.’s 4% notes due 2025 headed out about 1 bp tighter on Friday.

Goldman Sachs Group Inc.’s 3.5% senior notes due 2025 were unchanged.

JPMorgan Chase & Co.’s 3.125% notes due 2025 traded flat over the session.

In other secondary trading, Exxon Mobil Corp.’s bonds widened 3 bps to 4 bps.

Bank of America firms

Bank of America’s 4% notes due 2025 firmed about 1 bp to 202 bps bid, according to a market source.

Bank of America sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 16 at Treasuries plus 225 bps.

The financial services company is based in Charlotte, N.C.

Goldman unchanged

Goldman Sachs’ 3.5% notes due 2025 traded flat at 140 bps bid, a market source said.

The company priced an $800 million reopening of the notes (Baa1/A-/A) on March 25 at a spread of Treasuries plus 145 bps.

Goldman originally sold $1.7 billion of the notes on Jan. 20 at Treasuries plus 170 bps.

The financial services company is based in New York City.

JPMorgan stable

JPMorgan Chase’s 3.125% notes due 2025 were unchanged at 125 bps bid on Friday, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at Treasuries plus 145 bps.

The financial services company is based in New York City.

Exxon Mobil eases

Exxon Mobil’s 2.709% notes due 2025 eased 3 bps to 66 bps bid in the secondary market, a source said.

Exxon Mobil sold $1.75 billion of the notes (Aaa/AAA/) on March 3 at Treasuries plus 58 bps.

The oil and gas company is based in Irving, Texas.

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