Quiet calendar to continue in July; new industrial bonds improve; coming week seen busier

By Andrea Heisinger

New York, July 2 - It was an "unremarkable" end to a short week with a modest amount of high-grade bond issuance, a market source said early Thursday.

Although not technically an early market close, there was no issuance to speak of, as was expected.

"We probably could have not worked today," the source said in late morning, adding that his syndicate desk was already a "ghost town."

The secondary wasn't faring much better, with most industrial issues ending the week somewhat better overall, a trader in that sector said early in the day.

Spreads were generally wider by early afternoon as Treasury yields gained. The 30-year bond was 2 basis points better at a 4.31% yield while the five-year note was 10 bps tighter at a 2.4% yield.

July off to slow start

July began with a whimper in terms of new issuance volume, with the trend expected to continue for at least the coming week, a source said.

"The first week [of July] looks slow," he said. "A lot [of companies] are in blackout for earnings."

Asked for what is expected in the coming week after the long holiday weekend, he said it's "too hard to tell" with the tone prone to changing by Monday.

"We'll have to wait and see how things look at the open [Monday]," he said. "We may see some things that need to get done, but a lot will wait."

The coming week "won't be as slow as this week," a source said.

"Looking at July, we think it's going to follow the trend of the typically slower flow," he said, referring to past years. "That's what we're seeing."

Tampa Electric bond unchanged

A reopened 6.1% bond due 2018 from Tampa Electric Co. was virtually unchanged from its price a day earlier, a trader said early Thursday.

The bond priced at 210 bps over Treasuries and was quoted at 210 bps bid, 200 bps offered.

A bond also priced Wednesday by MidAmerican Energy Holdings was not seen trading. The 3.15% bond due 2012 was priced privately via Rule 144A, which may have explained its disappearance, the trader said.

Oracle tranches improve

The three bonds priced Tuesday by software maker Oracle Corp. were better across the board, a trader in the non-financial sector said early Thursday.

The 3.75% due 2014 was improved the most, trading at 109 bps bid after pricing at 120 bps over Treasuries.

A 5% due 2019 was in around 8 bps to 147 bps offered after selling at 155 bps over Treasuries.

The final tranche of 6.125% bonds due 2039 was sold at 185 bps over Treasuries and traded at 182 bps bid.

Non-financials better overall

Bonds in the non-financial sector "performed better overall" throughout the week, a trader said. He added that they were 1 to 2 bps tighter across the board.

The financial side remained mixed, as it was much of the week with some names performing significantly better than others.

The tone Thursday left the primary and secondary in the cold.

"Between the [unemployment] numbers coming out and everyone leaving early, it's quiet," a trader said.

Bank of America tops trading

Two bonds from Bank of America Corp. were among the most heavily traded by early Thursday afternoon, a trader said.

The financial services company, among those yet to pay back funds to the Federal Deposit Insurance Corp., saw its 7.625% bond due 2019 at the top of trading volume, with a 7.375% due 2014 trailing behind.

The new Oracle 5% due 2019 was also popular with investors, as was an old floating-rate note due 2010 from the software company.

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