High-grade primary silent as market focused on jobs data; $20 billion expected for week ahead

By Aleesia Forni

Virginia Beach, Dec. 6 - Activity in the high-grade bond market was muted on Friday as all eyes were focused on the U.S. jobs report.

The session did see details emerge on the recent sale of notes by BNP Paribas SA, which sold $2.5 billion of notes in three tranches.

The rush of investment-grade bond issuance continued during the week as more than $22 billion of paper was priced, and one source said that he had yet to see any "serious signs" of investor fatigue.

"Thermo priced this week with [something] like $20 billion in demand, so we'll see what happens," she added, referring to the $3.2 billion four-part sale of notes priced by Thermo Fisher Scientific Inc. on Wednesday.

Meanwhile, concerns that the Federal Reserve will cut back on its bond purchasing program soon were reinforced on Friday, as data was released that the economy added a better-than-expected 203,000 jobs in November.

Still, supply for the week ahead is expected to be around $20 billion. A source said he expects the bulk of that to price "early during the week."

In the secondary market, recent issues from Genworth Holdings Inc. and Ameren Illinois Co. were trading tighter in the secondary market during Friday's session.

Genworth's 4.8% senior notes due 2024 were quoted at 3 basis points better, while the recent 4.8% sale of 30-year notes from Ameren tightened 6 bps.

Genworth trades better

Genworth Holdings' recent sale of $400 million of 4.8% long 10-year notes was quoted 3 bps better at 191 bps bid, 189 bps offered on Friday, a trader said.

The notes (Baa3/BBB-/) priced with a spread Treasuries plus 195 bps on Thursday.

The financial security company is based in Richmond, Va.

Ameren firms

In other secondary action, Ameren's new 4.8% 30-year notes were seen 6 bps better at 85 bps bid, 82 bps offered.

The company sold $280 million of the notes (A3/A/BBB+) on Thursday at a spread of Treasuries plus 93 bps.

Ameren Illinois is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

BNP details $2.5 billion sale

BNP Paribas priced $2.5 billion of notes in three tranches, according to an informed source.

The sale included $350 million of floating-rate notes due 2016 priced at par to yield Libor plus 59 bps.

A $650 million issue of 1.25% notes due 2016 sold at 70 bps over Treasuries, or 99.897, to yield 1.251%.

There was also $1.5 billion of 2.4% five-year notes sold at 98 bps plus Treasuries.

Pricing was at 99.766 to yield 2.45%.

The three-year fixed-rate tranche sold in line with talk, while the five-years were sold at the tight end of talk.

BNP Securities Corp. was the bookrunner.

The financial services company is based in Paris.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.