Primary wraps $21 billion week; Bank of America firms; JPMorgan, Morgan Stanley soft

By Aleesia Forni and Cristal Cody

Virginia Beach, June 19 – The investment-grade bond market could see another busy week ahead to follow the more than $21 billion of supply priced this week.

Sources noted that potential volatility spurred by the negotiations in Greece will play a large role in the amount of supply that will hit the tape.

Around $25 billion to $30 billion of new issuance is predicted to price during what could be one of the last frenzied weeks of issuance before the summer slowdown.

Meantime, Lipper reported $161 million of outflows from corporate high-grade funds for the week ended June 17, bringing the year-to-date total to roughly $28.9 billion of inflows.

Lipper reported $110 million of outflows for the prior week.

In the secondary market, Bank of America Corp.’s 4% notes due 2025 traded 4 basis points better over the day.

Paper from Citigroup Inc., Goldman Sachs Group Inc. and Barclays plc was unchanged.

JPMorgan Chase & Co.’s 3.125% notes due 2025 traded 2 bps weaker on Friday.

Morgan Stanley’s 2.65% notes due 2020 widened 3 bps.

The Markit CDX North American Investment Grade series 23 index headed out modestly tighter to unchanged at a spread of 68 bps.

“After trading in approximately a 2 bp range in the second half of May, CDX.IG has become increasingly volatile in June, trading in a 7 bp range and reaching a new wide for series 24 earlier this week,” Barclays Bank plc analysts said in a report on Friday.

“Since the March 20 roll, most CDX.IG sectors are wider, led by communications, technology, and consumer cyclicals,” the report said. “Only two have rallied – energy and basic materials – partially reversing their underperformance since the middle of 2014.”

Bank of America firms

Bank of America’s 4% notes due 2025 firmed 4 bps to 199 bps bid in secondary trading on Friday, according to a market source.

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

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

Citigroup stable

Citigroup’s 3.3% senior notes due 2025 were unchanged at 144 bps bid during the session, a market source said.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

Goldman unchanged

Goldman Sachs’ 3.5% notes due 2025 traded flat at 158 bps bid on Friday, a source said.

Goldman sold $800 million of the notes (Baa1/A-/A) in a reopening on March 25 at Treasuries plus 145 bps.

The notes originally priced on Jan. 20 in a $1.7 billion offering at Treasuries plus 170 bps.

The financial services company is based in New York City.

Barclays flat

Barclays’ 2.875% notes due 2020 were unchanged in trading at 147 bps bid, a market source said.

Barclays sold $1 billion of the notes (Baa3/BBB/A) on June 1 at Treasuries plus 142 bps.

The financial services company is based in London.

JPMorgan soft

JPMorgan Chase’s 3.125% notes due 2025 eased 2 bps on Friday to 134 bps bid, according to a market source.

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

The financial services company is based in New York City.

Morgan Stanley eases

Morgan Stanley’s 2.65% notes due 2020 widened 3 bps over the day to 106 bps bid, according to a market source.

Morgan Stanley sold $2.5 billion of the notes (Baa2/A-/A) on Jan. 22 at Treasuries plus 130 bps.

The financial services company is based in New York City.

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