Primary ends on quiet note; Goldman Sachs, MUFG firm; Citigroup stable; credit spreads strong

By Aleesia Forni and Cristal Cody

New York, March 11 – The high-grade primary space was empty of any new deals on Friday, capping off a week that saw more than $32 billion of issuance.

This figure comes on the heels of the prior week’s $52 billion of new issuance and marks the fourth-straight week that the high-grade’s supply has topped $30 billion.

Also this week, Lipper US Fund Flows reported $2.1 billion of inflows into corporate investment-grade bond funds for the week ended March 9.

This follows the prior week’s $761 million of outflows and brings the total year-to-date outflows to about $3.9 billion.

With the Federal Reserve’s two-day policy meeting during the week ahead, sources are calling for a slight slowdown in primary activity.

Around $20 billion to $25 billion of issuance is predicted to enter the market.

“Probably not quite as big, but it will still definitely be busy,” one market source said.

Secondary market activity was light over the day with bonds trading mostly flat to tighter and credit spreads continuing to come in.

“Not much activity,” a trader said. “It was quiet for me.”

Credit spreads have tightened more than 10 basis points since the start of the week.

The Markit CDX North American Investment Grade index closed 8 bps tighter on Friday at a spread of 83 bps. The index opened the week at a spread of 95 bps.

Goldman tightens

Goldman Sachs Group Inc.’s 3.75% senior notes due 2026 traded 5 bps better on the day at 183 bps bid, according to a market source.

Goldman Sachs sold $1.75 billion of the notes (A3/BBB+/A) on Feb. 22 at a spread of 203 bps over Treasuries.

The financial services company is based in New York City.

MUFG stronger

Mitsubishi UFJ Financial Group, Inc.’s 3.85% senior notes due 2026 firmed 5 bps to 175 bps bid, a market source said.

MUFG sold $2.5 billion of the notes (A1/A) on Feb. 23 at Treasuries plus 215 bps.

The financial services company is based in Tokyo.

Citigroup stable

Citigroup Inc.’s 3.7% subordinated notes due 2026 were unchanged on Friday at 182 bps bid, according to a market source.

Citigroup sold $2 billion of the notes (Baa1/BBB+/A) on Jan. 5 at a spread of Treasuries plus 148 bps.

The financial services company is based in New York.

Deutsch Bank eases

Deutsche Bank AG’s 4.1% notes due 2026 were 1 bp weaker on Friday at 251 bps bid, a market source said.

Deutsche Bank sold $750 million of the notes (A3/BBB+/A) on Jan. 8 at a spread of 200 bps plus Treasuries.

The bank is based in Frankfurt.

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