Primary to stay busy in week ahead if conditions hold; financials widen, Hyatt firms

By Andrea Heisinger and Cristal Cody

New York, Aug. 5 - The coming week should see about the same amount of deals pricing in the high-grade bond market as there was in the past week, sources said on Friday.

There was about $7.64 billion of new paper priced in 15 deals for the first week of August.

But it's unclear what will be priced on Monday, one syndicate source said.

"There are things out there, but as usual, it's dependent on market conditions," she said.

The source said she knew of seven to 10 deals on the table for the coming week although negative headlines or economic data domestically or from Europe could send companies and investors hiding again.

"People don't care about spread," the source said. "Treasury yields are low."

The bond market was "all over the place" on Friday, a market source said, in reaction to lower unemployment numbers that came out, briefly sending the stock market up. Then the tone went back down as more negativity from analysis of those numbers crept into the market.

"We were up and down all day," the syndicate source said.

Overall trading volume fell 15% to less than $9 billion.

High-grade bonds moved wider in the secondary market on Friday, traders said.

Hyatt Hotels Corp.'s new bonds traded 2 basis points to 5 bps tighter on Friday, while other new deals were flat to weaker. Union Pacific Corp.'s notes were mostly flat.

Coca-Cola Co.'s paper widened 2 bps but otherwise traded tighter than where they priced.

JPMorgan Chase & Co.'s notes due 2021 were mostly unchanged on Friday after trading as much as 22 bps wider the previous day.

"Regional banks weren't too bad, but the investment banks and larger banks were 5 to 8 [bps] wider," a trader said.

The Markit CDX Series 15 North American high-grade index firmed 1 bp to a spread of 103 bps, according to Markit Group Ltd.

Treasuries dropped on Friday, erasing gains from earlier in the week. The 10-year note yield rose to 2.56% from 2.4%. The 30-year bond yield moved up to 3.84% from 3.67%.

Hyatt Hotels tightens

Hyatt Hotels' new bonds ended the week stronger on the bid side, a trader said. The company priced $500 million of senior notes (Baa2/BBB) in two tranches late on Thursday.

The $250 million tranche of 3.875% five-year notes priced at 287.5 bps over Treasuries. The notes due 2016 traded at 285 bps bid, the trader said.

The second tranche of $250 million of 5.375% 10-year notes priced at a spread of Treasuries plus 300 bps and firmed to 295 bps bid on Friday.

The hospitality company is based in Chicago.

Union Pacific flat

Union Pacific's 4.75% 30-year bonds (Baa2/BBB+) traded Friday at 109 bps offer, according to a trader.

The company sold $500 million of the bonds to yield 110 bps over Treasuries on Thursday.

The railroad transportation company is based in Omaha.

Coke notes active

Coca-Cola's 3.3% 10-year notes widened 2 bps in trading on Friday but still stayed tighter than where they priced on Wednesday, a trader said.

The notes were seen at 70 bps bid, 64 bps offered, wider than Thursday's trading level of 68 bps bid, 65 bps offered.

"I bought bonds this morning at 65 on the 10-year. Treasuries are just all over the place, depending on when you buy," the trader said.

The company priced $1 billion of the notes due 2021 (Aa3/A+/A+) at 72 bps over Treasuries.

The soft drink company is based in Atlanta.

JPMorgan holds

JPMorgan Chase's 4.35% 10-year notes (Aa3/A+/AA-) traded early Friday unchanged at 192 bps bid, a trader said.

The notes due 2021 widened in trading to 192 bps bid, 187 bps offered on Thursday from where they priced at 175 bps over Treasuries on Wednesday.

JPMorgan earlier in the week lowered its growth forecast for the fourth quarter and first half of 2012.

The financial services company is based in New York City.

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