High-grade action quiets; thin supply forecast; Lowe’s firms; Bank of America, Citi mixed

By Cristal Cody

Tupelo, Miss., April 21 – High-grade corporate issuers stayed to the sidelines for a second session on Friday ahead of the first round of France’s presidential election on Sunday, according to market sources.

New supply is expected to stay light in the week ahead with about $15 billion to $20 billion of volume forecast, according to a market source.

The Markit CDX North American Investment Grade index tightened less than 1 basis point on Friday to a spread of 67 bps.

New bonds priced over the week were mixed in the secondary market on Friday.

Lowe’s Cos., Inc.’s $3 billion of notes (A3/A-/) brought to the primary market in two parts on Wednesday traded about 2 bps to 4 bps better.

Bank of America Corp.’s $6.75 billion of notes (Baa1/BBB+/A) priced in four tranches on Wednesday were mixed.

Citigroup, Inc.’s $4.5 billion of notes (Baa1/BBB+/A) priced in three tranches on Tuesday traded mixed on Friday.

Lowe’s tightens

Lowe’s 3.1% notes due May 3, 2027 firmed to 88 bps bid, 85 bps offered in secondary trading, according to a market source on Friday.

Lowe’s sold $1.5 billion of the notes on Wednesday at a spread of Treasuries plus 90 bps.

The home improvement company is based in Mooresville, N.C.

Bank of America mixed

Bank of America’s 2.881% fixed-to-floating-rate notes due April 24, 2023 traded on Friday at 115 bps bid, 113 bps offered, a market source said.

Bank of America sold $1.25 billion of the notes on Wednesday at a spread of Treasuries plus 115 bps. The notes convert to a floating rate of Libor plus 102.1 bps starting April 24, 2022.

The company’s 4.244% fixed-to-floating-rate notes due April 24, 2038 firmed to 133 bps bid, 131 bps offered in secondary trading.

Bank of America sold $2 billion of the notes at a spread of Treasuries plus 137 bps. The notes convert to a floating rate of Libor plus 181.4 bps starting April 24, 2027.

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

Citigroup mixed

Citigroup’s 2.75% notes due April 25, 2022 were better in secondary trading at 106 bps bid, 103 bps offered on Friday, according to a market source.

Citigroup priced $2.25 billion of the notes on Tuesday at a spread of Treasuries plus 107 bps.

The company’s 4.281% fixed-to-floating-rate notes due April 24, 2048 softened to 147 bps bid, 144 bps offered in the secondary market.

Citigroup placed the $1 billion tranche at a spread of 145 bps over Treasuries. The notes convert to a floating rate of Libor plus 183.9 bps on and after April 24, 2047.

Citigroup is a financial services company based in New York.

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