High-grade primary quiet as Fed rate hike eyed; utility bonds soft; Home Depot steady

By Cristal Cody

Tupelo, Miss., Dec. 18 – The investment-grade bond market remained quiet on Tuesday with focus turned toward an expected rate hike following the Federal Reserve’s monetary policy meeting on Wednesday.

The Markit CDX North American Investment Grade 31 index ended mostly unchanged at a spread of 81 basis points.

Little issuance is expected by syndicate sources for the rest of the week or year, though a few deals could still price with up to $2 billion of high-grade supply forecasted for this week.

No reported issuers came to the primary market on Monday or Tuesday.

Month to date, nearly $9 billion of high-grade bonds have been sold. The month so far is the slowest month for investment-grade issuance since November 1997, a source said on Tuesday.

In addition, the Dow Jones industrial average and S&P 500 index are setting up for their worst December performance since the Great Depression of 1931, the source added.

In the secondary market, Oracle Corp.’s bonds traded about 3 bps tighter on the day following the company’s better-than-expected fiscal 2019 second-quarter earnings release in the previous session, a source said.

Meanwhile, Home Depot Inc.’s 3.9% senior notes due 2028 were flat.

Home Depot’s 3.9% senior notes due 2028 (A2/A) are quoted at 90 bps bid, a source said on Tuesday.

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