High-grade bond primary market stalls ahead of holiday; bank, financial paper mixed

By Aleesia Forni and Cristal Cody

New York, Nov. 24 – Investment-grade borrowers stood down on Tuesday ahead of what is expected to be another quiet session on Wednesday prior to the Thanksgiving holiday.

“Probably wrapped for the week,” one market source said.

The subdued primary follows Monday’s $4.1 billion primary session and a pulled deal from Vodafone Group plc.

However, sources continue to foresee a heavy amount of issuance heading to the primary in the coming weeks ahead of the Federal Reserve’s meeting in mid-December.

Participants anticipate potential issuers rushing to the market prior to the meeting and a potential rate hike, and sources are calling for a storm of issuers to price around $20 billion to $25 billion in the week ahead.

The Canadian primary market has seen a “flurry” in preferred share deal activity this week after a lull over the past month, a source said.

In secondary trading, bank and financial paper was mixed over the session.

JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 improved 4 bps.

Citigroup Inc.’s 4.4% subordinated notes due 2027 firmed about 1 bp on the day.

Bank of America Corp.’s 3.875% senior notes due 2025 were unchanged.

Goldman Sachs Group Inc.’s 4.25% subordinated notes due 2025 traded 2 bps weaker.

The Markit CDX North American Investment Grade 25 index was about 1 bp wider on Tuesday at a spread of 86 bps.

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