Investment-grade bond market subdued with jobs report in focus; Heinz bonds trade tighter

By Aleesia Forni

Virginia Beach, July 2 – Spreads in the investment-grade secondary market were mostly flat on Thursday with little activity to speak of as players focused on the release of the June jobs report.

The U.S. economy added 223,000 jobs in June, the Labor Department reported, while the unemployment rate fell to 5.3%.

The Markit CDX North American Investment Grade series 23 index was unchanged at a spread of 68 basis points.

Meantime, tranches of H.J. Heinz Co.’s recently priced $10 billion seven-part bond offering traded flat to tighter.

Investment-grade bond market activity is expected to pick up following the extended July 4 holiday weekend.

The market could see around $20 billion to $25 billion of new issuance for the first full week of July, sources say, in the wake of a no-print shortened week.

However, the primary’s pace will continue to depend on the ongoing Greek financial crisis.

H.J. Heinz’s $1 billion of 1.6% two-year notes were unchanged on Thursday at 85 bps offered.

The notes sold with a spread of Treasuries plus 95 bps on June 23.

The company’s $1.5 billion of 2% three-year notes were quoted 2 bp tighter at 92 bps offered after pricing with a spread of 100 bps over Treasuries.

The Pittsburgh-based food processing company’s $1 billion 5% 20-year note was quoted 2 bps better at 171 bps offered after pricing with a spread of Treasuries plus 185 bps.

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