June supply tops $96 billion; bank, financial paper trades mostly wider in secondary

By Aleesia Forni

Virginia Beach, June 30 – The investment-grade primary market was quiet again on Tuesday, wrapping up a month of June that hosted more than $96 billion of supply.

This follows May’s $157.47 billion total, which was the second busiest month ever.

The month’s total also pushes year-to-date issuance to more than $754 billion, according to Prospect News data.

The rest of the holiday-shortened week is expected to remain subdued for investment-grade bonds.

Sources had originally expected around $10 billion of new issuance.

Meantime, investment-grade credit spreads were mostly wider following earlier tightening on Tuesday.

The Markit CDX North American Investment Grade series 23 index was 2 basis points tighter compared to Monday’s close at a spread of 69 bps.

Bank and financial paper was 3 bps to 5 bps weaker overall during the session.

Bonds from Goldman Sachs and JPMorgan Chase widened on the day, while Citigroup Inc.’s 3.3% senior notes due 2025 firmed 5 bps.

HomeFed three-year notes

HomeFed Corp. announced on Tuesday its pricing of $125 million of 6.5% senior notes due June 30, 2018 in a company press release.

The notes are fully and unconditionally guaranteed by HomeFed’s existing wholly owned subsidiaries and all future subsidiaries.

The company plans to use the proceeds from the sale of the notes to finance its previously announced acquisition of land in the Otay Ranch area of San Diego County, Calif.

The Carlsbad, Calif.-base company engages in the investment in and development of residential and commercial real estate properties.

Citigroup better

In secondary market action, Citigroup’s 3.3% notes due 2025 firmed 5 bps over the session to 144 bps bid, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa2/A-/A) on April 22 at Treasuries plus 135 bps.

The investment bank is based in New York.

Goldman widens

Goldman Sachs’ 3.5% notes due 2025 were 3 bps wider on the day at 160 bps bid, a source said.

Goldman sold $800 million of the notes (Baa1/A-/A) in a March 25 reopening at 145 bps over Treasuries.

The notes originally priced on Jan. 20 in a $1.7 billion offering at Treasuries plus 170 bps.

The financial services company is based in New York City.

JPMorgan soft

JPMorgan Chase’s 3.125% notes due 2025 eased 6 bps on Tuesday to 146 bps bid, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Jan. 16 at 145 bps over Treasuries.

The financial services company is based in New York City.

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