Morning Commentary: Supply picks up; Capital One Financial offers notes; Goldman improves

By Cristal Cody

Tupelo, Miss., Jan. 25 – At least one corporate issuer is marketing new investment-grade bonds on Thursday after supply stayed quiet in the previous session.

Capital One Financial Corp. plans to price a three-tranche offering of senior notes.

On Wednesday, KfW was the sole reported issuer in the primary market with a $3 billion sale of long 10-year notes.

Deal volume is expected to miss market expectations of about $20 billion to $25 billion of issuance with less than $5 billion of corporate bonds priced week to date, a source said.

Including KfW’s deal, SSA volume week to date totals $8 billion.

While new issuance has thinned over the week, secondary trading has been strong.

On Wednesday, $23.09 billion of investment-grade bonds were traded, compared to $20.56 billion on Tuesday and $17.87 billion on Monday, according to Trace.

Goldman Sachs Group Inc.’s notes (A3/BBB+/A) that priced a week ago were active and trading better over the morning, according to a market source.

Goldman Sachs’ 3.2% notes due Feb. 23, 2023 climbed to 100.93 in mid-morning trading. The notes last traded on Wednesday at 100.11.

The issue priced in a $1.75 billion tranche on Jan. 18 at a 99.95 and a spread of Treasuries plus 80 basis points.

Elsewhere early Thursday, the three-month Libor yield climbed 1 bp to 1.75%, a source said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.