No new high-grade bonds price; issuers likely waiting until Wednesday; secondary also light

By Andrea Heisinger and Cristal Cody

New York, July 2 - New bonds took a vacation on Friday, just as people at many syndicate desks did ahead of the long July 4 weekend.

A source said in late morning, "If anyone is working, they're not pricing bonds."

There were no sales expected, and any left in the pipeline were held until the coming Tuesday or Wednesday.

The market tone was likely volatile for the day anyway as disappointing jobs data came out showing the private sector was not adding jobs at an increased rate in June. This fueled more worries that the country could be going back into a recession.

The secondary market was light on volume and traders as well.

"Very dead today," one trader said.

Investment-grade debt sold earlier this week from Wal-Mart Stores Inc. and Campbell Soup Co. firmed in trading, while Anadarko Petroleum Corp.'s bonds widened in secondary trading, according to sources.

The CDX Series 14 North American investment-grade index firmed 1 basis point to a mid bid-asked spread of 122 bps, one source said.

U.S. Treasuries slumped on Friday on better-than-expected employment data.

Benchmark 10-year yields eased 3 bps to 2.97%. Yields on the 10-year note have hit the lowest over the week since April 2009.

Yields on 30-year bonds eased 5 bps to 3.94% from 3.89% the previous day.

Data from the Labor Department showed the unemployment rate fell to 9.5% from 9.7%, with a drop due to a smaller labor force - not people getting jobs, one source said.

Issuers to feel out market

New deals are not expected to come to the market until Wednesday "at the earliest," a market source said on Friday.

"It depends on what happens between now and then, but I don't see people going on Tuesday," he said.

"Wednesday is the 'go' day for us. If the open's good on Tuesday, we'll see some stuff [later in the week]."

It's unclear what companies will issue, but deals are unlikely to come from many financials.

The past week saw spotty issuance and a grab-bag of deals that was a mix of corporate and retail notes. Those companies that did price bonds were mostly high-quality names.

Campbell's tighter

Campbell Soup's 3.05% senior unsecured notes due 2017 firmed in trading on Friday to 62 bps over Treasuries, compared to 67 bps the day before, according to a source.

Campbell Soup sold the notes (A2/A/A) on Wednesday at Treasuries plus 65 bps.

The processed food company is based in Camden, N.J.

Wal-Mart stronger

Wal-Mart Stores Inc.'s new notes stayed firm in trading on Friday, a source said.

Wal-Mart sold $3 billion of senior unsecured notes (Aa2/AA/AA) in three tranches on Wednesday.

The Bentonville, Ark.-based retailer priced $750 million of 2.25% notes due 2015 at Treasuries plus 53 bps. The notes were quoted Friday afternoon at 44 bps over Treasuries, a source said.

Wal-Mart also sold $1.5 billion of 3.625% notes due 2020 at Treasuries plus 70 bps. The 10-year notes were 5 bps tighter at 65 bps on Friday, according to the source.

Anadarko weaker

Anadarko Petroleum's bonds widened in trading on Friday, according to sources.

For example, Anadarko's 5.95% notes due 2016 were seen at 638 bps versus 625 bps on Thursday.

Anadarko Petroleum's bonds continued to move out in June after Moody's Investors Service cut the company's rating to below investment grade over the company's liability with the continued oil leak in the Gulf of Mexico.

The Woodlands, Texas-based company has 25% ownership of the leaking oil well.

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