KfW prices floaters, new corporate trades on hold; positive tone continues in muted secondary

By Aleesia Forni and Andrea Heisinger

New York, July 2 - A sovereign offering from Germany's KfW was the only action in the high-grade bond market on Tuesday.

The development bank priced $1 billion of two-year floating-rate notes.

Elsewhere in the market, the chance for any issuance for the week dimmed as it became clear there were no corporate issuers bringing deals.

"We're keeping our fingers crossed for [sales] Monday," a market source said in the afternoon.

Although the market will be open Friday, many people will be on vacation, and unemployment numbers for June will be released.

"It's a non-day," said the source.

The positive tone to the high-grade bond market continued into Tuesday's session despite a lack of action, market sources said.

"Not too much [activity] so far," one trader said early during the day's session. "[The market is] very quiet with the holiday week, as you might assume."

The Markit CDX North American Investment Grade index was 2 basis points wider at a spread of 86 bps.

A trader at another desk saw Wednesday's offering from ITC Holdings Corp. mostly wider in the secondary market.

KfW's floaters

KfW sold $1 billion of two-year floating-rate global notes (Aaa/AAA/AAA) at par to yield one-month Libor plus 6 bps, according to an FWP filing with the Securities and Exchange Commission.

BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and Goldman Sachs International were bookrunners.

The German government-owned development bank is based in Frankfurt.

ITC notes weaker

ITC Holdings' $250 million of 4.05% 10-year notes traded 2 bps wider compared to levels seen late Monday at 159 bps bid, 154 bps offered, a trader said at the end of the session.

ITC Holdings sold the notes at a spread of Treasuries plus 155 bps on Wednesday.

The $300 million tranche of 5.3% 30-year bonds was quoted 1 bp wider at 175 bps bid, 171 bps offered. ITC Holdings sold the bonds at a spread of 175 bps over Treasuries.

The power transmission company is based in Novi, Mich.

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