Week's supply tops $20 billion; rush of supply expected for week ahead; Time Warner Cable firms

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 21 - The high-grade bond market ended a busy holiday-shortened week on a quiet note Friday, with no new issues pricing.

A positive tone to the market, coupled with companies exiting earnings blackout periods, helped push high-grade supply to more than $20 billion for the week.

Following weeks of primary sessions dominated by financial names, corporate issuers made up a majority of the week's primary market supply.

Many were able to tighten talk significantly from earlier guidance and receive massive order books.

"Continuing to see strong demand for non-FIGs," one market source said on Friday.

With the strong performance of recently priced corporate deals, sources are expecting issuers to rush to the primary in the week ahead.

One source pegged the upcoming week at $20 billion to $25 billion, while another suggested the primary could see up to $30 billion of new paper.

Investment-grade bonds traded flat to modestly tighter over the day, according to market sources.

The Markit CDX North American Investment Grade series 21 index was unchanged at a spread of 65 basis points.

Time Warner Cable Inc.'s 4.125% notes due 2021 firmed slightly in the secondary market, a source said.

Comcast Corp.'s new 3.6% senior notes due 2024 (A3/A-/A-) were quoted tighter at 86 bps bid earlier in trading on Friday, a source said.

The Philadelphia-based media, technology and entertainment company sold $1.2 billion of the notes at a spread of Treasuries plus 93 bps on Wednesday.

Comcast announced a week ago that it will acquire Time Warner Cable in a $45.2 billion all-stock deal.

Time Warner Cable firms

Time Warner Cable's 4.125% notes due 2021 (Baa2/BBB/BBB) traded at 77 bps on Friday, about 3 bps tighter than Wednesday, a source said.

The seven-year notes came in from the 215 bps area following the Comcast merger announcement, according to traders.

Time Warner Cable sold $700 million of the 4.125% notes due 2021 at Treasuries plus 155 bps in 2010.

The broadband communications company is based in New York City.

CDS prices mostly lower

Investment-grade bank and brokerage CDS prices mostly fell, according to a market source.

Bank of America Corp.'s CDS costs firmed 1 bp to 70 bps bid, 73 bps offered. Citigroup Inc.'s CDS costs declined 1 bp to 79 bps bid, 82 bps offered. JPMorgan Chase & Co.'s CDS costs firmed 1 bp to 60 bps bid, 64 bps offered. Wells Fargo & Co.'s CDS costs were unchanged at 38 bps bid, 42 bps offered.

Merrill Lynch's CDS costs fell 1 bp to 75 bps bid, 80 bps offered. Morgan Stanley's CDS costs eased tightened 1 bp to 87 bps bid, 90 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 1 bp to 90 bps bid, 93 bps offered.

Paul Deckelman contributed to this review

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