Strong appetite expected to open 2016; Goldman, Morgan Stanley paper firm; Walgreens up

By Aleesia Forni and Cristal Cody

New York, Dec. 24 – High-grade bond activity was slim during the Thursday session ahead of the market’s closure for the Christmas holiday.

The investment-grade primary was empty of any new issuance, making it the 10th-straight session that saw no new deals enter the market.

The week ahead is also expected to be without any new deal pricings.

However, following the primary drought, one market source noted that investor appetite should be strong to open January.

Around $110 billion to $120 billion of primary issuance is expected during 2016’s opening month.

Investment-grade bonds traded mostly flat to better over the short session.

Goldman Sachs Group Inc.’s 4.25% subordinated notes due 2025 firmed 2 basis points.

Morgan Stanley’s 4% senior notes due 2025 traded 1 bp better in the secondary market.

Citigroup Inc.’s 2.65% notes due 2020 headed out unchanged from Wednesday after tightening over the morning.

In other secondary trading, Walgreens Boots Alliance Inc.’s 3.8% senior notes due 2024 firmed 1 bp but remain soft since the company announced plans in October to acquire Rite Aid Corp.

The Markit CDX North American Investment Grade 25 index ended about 1 bp weaker on Thursday at a spread of 91 bps.

Goldman firms

Goldman’s 4.25% subordinated notes due 2025 traded 2 bps tighter at 208 bps bid on Thursday, according to a market source.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The financial services company is based in New York City.

Morgan Stanley improves

Morgan Stanley’s 4% notes due 2025 firmed 1 bp to 140 bps bid over the day, a market source said.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

Citigroup unchanged

Citigroup’s 2.65% notes due 2020 were unchanged as the market closed at 110 bps bid, a source said.

The notes traded 5 bps tighter at the start of the day at 104 bps offered.

Citigroup sold $2.7 billion of the notes (Baa1/A-/A) on Oct. 19 at a spread of Treasuries plus 133 bps.

The financial services company is based in New York.

Walgreens better

Walgreens Boots Alliance’s 3.8% notes due 2024 firmed 1 bp to 191 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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