Primary activity likely done for 2015; Charter softens; Marathon Oil, Walgreens stable

By Aleesia Forni and Cristal Cody

New York, Dec. 21 – Syndicate desks were thinly staffed to open the holiday-shortened week, a market source said Monday, with little activity to speak of in the investment-grade bond space.

“Nothing happening,” the source said of the day’s events, marking the seventh-straight trading day that saw no new deals enter the high-grade primary.

The late-year slowdown set in slightly earlier this year due in part to the Federal Open Market Committee’s two-day policy meeting and ultimate rate hike last week.

This, coupled with volatile market conditions and tumbling oil prices, kept a lid on issuance during the latter half of December.

Roughly $58 billion of new issuance has entered the investment-grade primary market during the final month of the calendar year.

No new deals are expected to price this week.

The Canadian high-grade primary market is likely finished for the year, a source said on Monday.

“I would be very surprised if someone launched an issue in this market,” the source said. “I think we’re over until the first week of 2016.”

The Markit CDX North American Investment Grade 25 index closed the day unchanged to modestly tighter at a spread of 95 bps.

Investment-grade bonds were mostly flat to softer in secondary trading.

Charter Communications Inc.’s 4.908% notes due 2025 traded 5 bps weaker.

Marathon Oil Corp.’s 3.85% senior notes due 2025 headed out mostly unchanged.

Walgreens Boots Alliance Inc.’s 3.8% senior notes due 2024 were flat but quoted more than 10 bps weaker since the company’s deal to acquire Rite Aid Corp. was announced in October.

Charter Communications eases

Charter Communications’ 4.908% notes due 2025 eased 5 bps over the day to 277 bps bid, a market source said.

The company sold $4.5 billion of the bonds (Ba1/BBB-) on July 9 at a spread of Treasuries plus 260 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

Marathon Oil unchanged

Marathon Oil’s 3.85% notes due 2025 headed out mostly unchanged at 469 bps bid on Monday, according to a market source.

The notes (Baa1/BBB) traded about 1 bp weaker at the start of the day at 463 bps offered.

Marathon Oil sold $900 million of the notes on June 1 at a spread of Treasuries plus 170 bps.

The energy company is based in Houston.

Walgreens steady

Walgreens Boots Alliance’s 3.8% notes due 2024 were unchanged at 192 bps bid in secondary trading, according to a market source.

The company sold $2 billion of the notes (Baa2/BBB) on Nov. 6, 2014 at Treasuries plus 145 bps.

Walgreens Boots Alliance is a subsidiary of Deerfield, Ill.-based drugstore operator Walgreen Co.

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