IADB, Freddie Mac price; week's supply tops $30 billion; spreads unchanged; ONE Gas flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Jan. 17 - Inter-American Development Bank and Freddie Mac both sold new deals on Friday, capping off another flooded week of financial issuance in the high-grade market.

Both deals had been announced on Thursday for Friday pricing.

IADB was in the market with an upsized $700 million five-year floater, which sold at par to yield Libor plus 4 basis points.

Meanwhile, Freddie Mac sold $4.5 billion of 0.875% three-year Reference Notes to yield Treasuries plus 13 bps.

Pricing was at 99.839 to yield 0.928%.

There were early whispers of another possible financial deal pricing on Friday, though ultimately no other issuers tapped the market during the session.

"Thought we could maybe see [a new issue] today," one market source said.

Roughly $32 billion of high-grade paper priced during the week, making this the second week in a row during which supply topped the $30 billion mark.

The total blew out sources' expectations for around a $25 billion week.

Looking ahead to next week, one market source said there are "no signs of a slowdown" for financial issuers in the high-grade primary.

Around $25 billion of supply is predicted for the week ahead.

Trading action stayed light on Friday in front of the holiday weekend, according to market sources.

"Seemed like a lackadaisical day," a trader said. "Spreads look unchanged to a touch wider."

The Markit CDX North American Investment Grade series 21 index ended unchanged at a spread of 65 bps.

High-grade bond market activity was "pretty light" on Friday, but there "seems to be plenty of interest," one source said.

Freddie Mac Reference Notes

Freddie Mac priced a $4.5 billion 0.875% three-year Reference Note on Friday to yield Treasuries plus 13 bps, according to an informed source and a company press release.

Pricing was at 99.839 to yield 0.928%.

Bookrunners were Barclays, Goldman Sachs & Co. and J.P. Morgan Securities LLC.

The government-backed mortgage lender is based in McLean, Va.

IADB upsizes

Inter-American Development Bank priced an upsized $700 million five-year floating-rate note at par to yield Libor plus 4 bps on Friday, an informed source said.

Pricing was on top of talk.

Barclays, Goldman Sachs and RBC Capital Markets were the joint bookrunners.

The issuer provides financing for Latin American and Caribbean countries and is based in Washington, D.C.

ONE Gas unchanged

ONE Gas Inc.'s new three-part offering brought at the start of the week stayed flat in light trading action, according to market sources.

"Not seeing a thing on ONE Gas," a trader said.

The company's tranches of 2.07% notes due 2019, 3.61% notes due 2024 and 4.658% notes due 2044 priced on Monday.

ONE Gas sold $300 million of the five-year notes at par to yield Treasuries plus 48 bps. The company priced $300 million of the 10-year notes at par to yield Treasuries plus 78 bps and $600 million of the 30-year bonds at 99.99 to yield 4.658%, or a spread of Treasuries plus 88 bps.

ONE Gas is a wholly owned subsidiary of Oneok Inc., a Tulsa, Okla.-based natural gas company.

Bank/brokerage CDS costs mixed

Investment-grade bank and brokerage CDS prices were unchanged to lower, according to a market source.

Bank of America Corp.'s CDS costs were flat at 75 bps bid, 78 bps offered. Citigroup Inc.'s CDS costs firmed 1 bp to 69 bps bid, 72 bps offered. JPMorgan Chase & Co.'s CDS costs ended unchanged at 65 bps bid, 67 bps offered. Wells Fargo & Co.'s CDS costs ended flat at 39 bps bid, 41 bps offered.

Merrill Lynch's CDS costs closed unchanged at 77 bps bid, 82 bps offered. Morgan Stanley's CDS costs declined 1 bp to 85 bps bid, 88 bps offered. Goldman Sachs Group, Inc.'s CDS costs ended unchanged at 91 bps bid, 93 bps offered.

Paul Deckelman contributed to this review.

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