High-grade supply quiet, hits month’s deal forecast; credit spreads, energy bonds widen

By Cristal Cody

Tupelo, Miss., Feb. 28 – The investment-grade primary market stayed quiet on Friday, ending a week with little activity.

Only three reported issuers tapped the primary market this week as stocks plunged, credit spreads widened and Treasuries rallied in a risk-off trade on growing fears of a coronavirus pandemic and limited supply chains.

High-grade credit spreads have widened more than 21 basis points since the start of the week.

The Markit CDX North American Investment Grade 33 index closed Friday more than 3 bps softer at a spread of 67.51 bps.

Stocks remained mostly weak on Friday.

Treasuries continue to rally in the risk-off trade. The 10-year note ended the day down 17 bps at 1.127%.

The week’s lone corporate issue came from Fulton Financial Corp.’s $375 million sale of fixed-to-floating rate subordinated notes in two tranches on Tuesday.

In the sovereign, supranational and agency market, CPPIB Capital Inc. priced $1 billion of five-year notes on Wednesday and the European Investment Bank sold $1 billion of four-year floating-rate notes on Thursday.

About $25 billion to $30 billion of investment-grade deal volume was expected this week.

Still, volume for the month hit syndicate forecasts of about $90 billion to $100 billion.

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