Light activity expected for primary this week; spreads mostly flat; Bank of America firms

By Aleesia Forni

Virginia Beach, Aug. 25 – The high-grade bond market was quiet on Monday, with no new deals pricing during the session.

“Lots [of bankers] out this week,” a source said on Monday.

Sources are expecting a lack of primary activity this week ahead of the extended Labor Day holiday weekend.

Action should likely resume once September is underway.

In the secondary market, spreads were mostly unchanged to slightly tighter.

The Markit CDX North American Investment Grade series 22 index firmed 2 basis points on Monday to a spread of 56 bps.

One source noted that bank and financial paper was mostly flat during Monday’s session.

Bank of America Corp.’s 4% notes due 2024 (Baa2/A-/A) firmed 1 bp compared to Friday’s session. The notes traded tighter at 129 bps offered, a market source said.

In other trading, bonds from Roche firmed on the day following the announcement that the company plans to acquire biotechnology company InterMune for $8.3 billion in cash.

The tranche was quoted at 45 bps bid late Monday.

The $4.5 billion of 6% bonds due 2019 was part of an upsized $16 billion six-part offering that priced in 2009. The deal was, at the time, the largest corporate new issue on record.

Investment-grade bank and brokerage CDS prices were lower again on Monday, according to a market source.

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