ECB comments cause tone to drop; issuers hold out for coming week; recent deals trade mixed

By Aleesia Forni and Andrea Heisinger

New York, Aug. 2 - No straight high-grade bond deals priced on Thursday, sources said, as issuers opted to wait until the coming week.

Equity markets tumbled at the open on comments from the European Central Bank meeting. President Mario Draghi talked of buying government bonds in the euro zone, but there wasn't much clarity that would happen soon, and borrowing costs rose in Italy and Spain as a result.

Friday is expected to have little issuance as July's jobs report is released.

"We're basically done for the week," a syndicate source said. "Still, we already had a busy week."

According to data compiled by Prospect News, $15.67 billion of bonds priced so far this week, which exceeded expectations.

The bond market was "down for the most part" on the day, a market source said after the close. "Treasury yields were a little bit back up. They were down earlier, obviously."

The market source left open the possibility of a small deal or two making their way to the primary to end the week.

"I haven't heard of anything, but there could be something small if the market looks OK and someone needs to go," the source said. "Everyone's geared up for next week."

Recent issues were mixed in trading on Thursday. Private Export Funding Corp.'s 1.45% seven-year notes tightened 3 basis points, and Entertainment Properties Trust's 5.75% 10-year notes closed the session wider.

Entertainment Properties wider

Entertainment Properties Trust's $350 million 5.75% 10-year senior notes widened during Thursday's trading to 100.25 bid, 101 offered.

The notes priced on Wednesday at 99.998 to yield 5.75%.

The real estate investment trust of theaters, entertainment complexes and specialty properties is based in Kansas City, Mo.

Pefco tighter

Tuesday's issuance from Private Export Funding continued to tighten in trading, a bond source said.

The source quoted the notes at 45 bps bid, 42 bps offered, 3 bps tighter than Tuesday's levels.

Private Export Funding sold $400 million of 1.45% seven-year notes (Aaa/AA+/) to yield Treasuries plus 48 bps.

The company assists with financing U.S. exports through private capital and is based in New York.

Scotiabank firms

The secondary also saw Bank of Nova Scotia's 1.85% notes due 2015 tighten 3 bps on Thursday to 55 bps bid, according to a market source.

The bank priced the $1 billion issue at 147 bps over Treasuries in January.

Goldman Sachs wider

Meanwhile, Goldman Sachs Group, Inc.'s 30-year bonds due 2037 closed the session at 402 bps bid, 8 bps wider than Wednesday's levels.

Goldman Sachs priced the $2.5 billion of 6.75% bonds at 190 bps over Treasuries in September 2007.

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