Long weekend makes coming week's deals difficult to forecast; Coca-Cola, Noble Energy firm

By Andrea Heisinger and Cristal Cody

New York, Feb. 18 - The coming week in the investment-grade bond market is full of uncertainty because of the long holiday weekend and continuing unrest in countries overseas.

Sources said late on Friday that syndicate desks and companies likely won't make a decision until the open Tuesday whether to tap the primary market or not.

"It's very market and tone dependent right now," one source said.

He added that his desk was looking at two to three trades for the coming week, and forecasting between $12 billion and $17 billion of issuance. His desk saw $17.25 billion of new deals throughout the past week, while Prospect News data showed $15.638 billion as of early Friday afternoon.

"If [the market] isn't opportunistic and constructive, we'll see probably $10 [billion] to $12 billion," he said. "If things go well and everything that's on deck [prices], it could be $17 [billion]."

Another source said that they "haven't heard anything" about what the coming week could bring for new deals.

"Nothing too crazy," they said in reference to volume. "There's all this stuff going on overseas, so who knows what will happen."

Trading volume was low on Friday. Overall investment-grade Trace volume was less than $7 billion, a source said.

"Looks like a lot of people took an early close," a trader said.

The Markit CDX Series 14 North American investment-grade index eased 1 basis point to a spread of 80 bps, according to Markit Group Ltd.

In secondary trading, Coca-Cola Enterprises, Inc.'s notes due 2021 sold earlier in the week continued to stay tighter, a source said. Noble Energy, Inc.'s bonds due 2041 also were stronger in the secondary.

Treasuries ended the week lower on choppy trading.

Treasury yields were slightly higher on the longer end of the curve. The 10-year note yield was up 1 bp at 3.58%. The 30-year bond yield rose 2 bps to 4.69%.

"We saw a block of five-year futures trading being done. There was a lot of jitteriness about leaving those short positions in Treasuries open for the long weekend," a source said. "We saw a sell-off well into early afternoon; then it rallied all the way back for most. The curve should flatten up over the next couple of days."

Coca-Cola firmer

Coca-Cola Enterprises' new notes due 2021 in light activity were seen quoted at 85 bps offered, a trader said.

The company sold $300 million of the 4.5% 10-year senior notes (A3/BBB/BBB+) at a spread of Treasuries plus 93 bps on Tuesday.

The marketer, distributor and producer of Coca-Cola products is based in Atlanta.

Noble Energy's 2041s hold up

Noble Energy's long bonds have stayed strong in secondary trading since they priced Tuesday, though no activity was seen on Friday, a trader said.

"Nothing since midday yesterday" when the bonds were seen at 133 bps bid, 131 bps offered, the trader said.

The company sold $850 million of the 6% 30-year senior bonds (Baa2/BBB) at a spread of 137.5 bps over Treasuries.

The crude oil and natural gas exploration and production company is based in Houston.

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