Market volatility sidelines issuers; Citigroup flat; Goldman firms; Morgan Stanley softens

By Aleesia Forni and Cristal Cody

New York, Feb. 24 – The high-grade primary market took a breather on Wednesday, with volatility in oil prices and an earlier drop in stocks helping keep issuers on the sidelines.

Inter-American Development Bank entered the sleepy primary, selling $500 million of floating-rate notes (Aaa/AAA) due April 20, 2020 on Wednesday at par to yield Libor plus 32 bps, according to a market source.

The notes sold in line with talk.

BofA Merrill Lynch and BMO Capital are the joint bookrunners.

Elsewhere on Wednesday, Freddie Mac said that it would forgo issuing Reference Notes on its Feb. 24 announcement date.

The quiet day follows what had been two frenzied days of issuance to open the week.

Roughly $29 billion of investment-grade supply has priced so far this week.

Sources had called for around $30 billion of supply following last week’s more than $41 billion total.

Credit spreads ended mostly unchanged, while high-grade bonds were mixed in secondary trading over the day.

The Markit CDX North American Investment Grade index closed flat to modestly softer at a spread of 115 basis points.

Citigroup Inc.’s 3.7% subordinated notes due 2026 were unchanged on Wednesday.

Goldman Sachs Group Inc.’s new senior notes (A3/BBB+/A) traded 1 bp to 5 bps better earlier in the day.

Morgan Stanley’s 3.875% senior notes due 2026 headed out 4 bps weaker.

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