Lull in new deals continues; coming week seen slow; recent issues see 'pretty good demand'

By Aleesia Forni and Andrea Heisinger

New York, Aug. 24 - A week of light sales of investment-grade bonds ended on Friday with no new deals being contributed to the small calendar that mostly was priced during three days.

It wasn't headlines that left the market wanting for new deals, but a slowdown ahead of the Labor Day holiday.

"Next week is going to be even worse," a source said, referring to another expected drop in volume.

The summer has been unusually busy in the primary market, and many are taking a last opportunity for vacations to give the market a breather prior to another bump in new deals at the top of September following Labor Day.

When asked about deals expected for Monday and rest of the coming week, a syndicate source said, "We have nothing," adding that he wasn't hearing of much away either.

"If anything, there will be a trade or two," he said. Any deals will likely be priced on Monday or Tuesday before desks become even more thinly staffed.

Other market sources echoed that there will be virtually no new deals until September.

"Everyone's gearing up for Labor Day," the syndicate source said. "It should be a really busy week after that."

The secondary market was similarly muted to end the week, though one secondary source continued to see an appetite for existing bonds.

"From what I can see, it still looks like we've got pretty good demand [for recent issuances]," the source said.

The Markit CDX Series 18 North American Investment Grade index was 1 bps tighter at a spread of 101 bps bid.

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