No slowdown in sight for high-grade primary; Bristol-Myers notes flat; ABN slightly wider

By Cristal Cody and Aleesia Forni

Virginia Beach, Oct. 25 - A strong week for the high-grade bond market ended on a typical quiet note on Friday, with another busy week ahead expected for the primary market.

A "lackluster" jobs report on Tuesday reaffirmed beliefs that the Federal Reserve will delay tapering its stimulus program, persuading a number of issuers to hit the primary during the week.

Details emerged of International Bank for Reconstruction and Development's (World Bank) recent $6 billion two-part sale of notes.

The deal included $3 billion of 0.375% two-year notes sold at Treasuries plus 7 basis points and $3 billion of 2.125% seven-year notes sold at Treasuries plus 27 bps.

Roughly $17 billion of new paper was sold during the week, falling in line with predictions.

Players are expecting the pace of issuance in the investment-grade primary market to continue for the week ahead.

One market source said he is expecting a $15 billion week, while another source said the total could fall within $15 billion to $20 billion.

Investment-grade bonds traded mostly flat in light activity on Friday, market sources said.

The Markit CDX North American Investment Grade series 21 index was unchanged at a spread of 72 bps.

"It's been a little quiet on the bond side," one trader said.

Bristol-Myers Squibb Co.'s notes continued to trade wrapped around issuance in Friday's secondary market, according to a trader.

ABN Amro Bank NV's paper stayed higher in late afternoon trading, a trader said.

World Bank sells $6 billion

World Bank detailed its recent $6 billion sale of notes (Aaa/AAA/) in two tranches, according to a company press release.

The company sold $3 billion of 0.375% two-year notes with a spread of Treasuries plus 7 bps.

Pricing was at 99.996 to yield 0.377%.

There was also a $3 billion seven-year issue of 2.125% notes sold at Treasuries plus 27 bps.

The notes priced at 99.748 to yield 2.164%.

The order book reached $10 billion.

Barclays, Daiwa Capital Markets, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC were the joint bookrunners.

The issuer is based in Washington, D.C.

Bristol-Myers flat

Bristol-Myers Squibb's 3.25% notes due 2023 (A2/A+/) traded going out on Friday at 98.8 bid, 99.2 offered, a trader said.

Bristol-Myers Squibb sold $500 million of the notes on Thursday as part of a three-tranche offering at 98.912 to yield 3.379%.

Bristol-Myers is a New York-based health-care company.

ABN Amro holds

ABN Amro Bank's 2.5% notes due 2018 (A2/A/A+) were quoted Friday afternoon at par bid, 100.2 offered, a trader said.

The bank sold $1 billion of the five-year notes on Wednesday at 99.841 to yield 2.534%.

The bank and financial services company is based in Amsterdam.

Bank/brokerage CDS costs hover

Investment-grade bank and brokerage CDS prices were mostly unchanged to lower on the day, according to a market source.

Bank of America Corp.'s CDS costs ended flat at 98 bps bid, 102 bps offered. Citigroup Inc.'s CDS costs were unchanged at 88 bps bid, 92 bps offered. JPMorgan Chase & Co.'s CDS costs eased 5 bps to 87 bps bid, 90 bps offered. Wells Fargo & Co.'s CDS costs were unchanged at 55 bps bid, 59 bps offered.

Merrill Lynch's CDS costs ended flat at 97 bps bid, 102 bps offered. Morgan Stanley's CDS costs firmed 2 bps to 112 bps bid, 116 bps offered. Goldman Sachs Group, Inc.'s CDS costs declined 3 bps to 115 bps bid, 119 bps offered.

Paul Deckelman contributed to this review.

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