New bonds appear from JPMorgan; coming week seen busy; Lloyds firms; new utility bonds narrow

By Andrea Heisinger and Cristal Cody

New York, Jan. 14 - Just when the market thought it was done with new paper for the week, JPMorgan Chase & Co. priced bonds on Friday afternoon.

The company sold $3.25 billion in two tranches. They both have three-year maturities, but one has a fixed-rate coupon and the other a floating rate.

Sources unanimously predicted that the coming week will be busy after the long weekend. The bond market is closed Monday for the Martin Luther King Jr. holiday.

"I think once we have a lot of companies announcing earnings it's going to quiet down, but I'm not sure when that will happen," one market source said. "I'm hearing companies are going to price after they announce."

Tuesday and Wednesday could be the highest-volume days of the coming week, a source said, because jobless claims data comes out Thursday.

"I've heard of a few things for Tuesday already," the source said.

Another syndicate source estimated the coming week could see $20 billion to $25 billion of new bonds. Nearly every major syndicate desk has a handful of sales lined up, she said.

Traders cleared out early Friday ahead of the holiday. Market activity was quiet, although overall investment-grade Trace volume rose 20% to about $14 billion, a source said.

"Even though it was not an early close, it seemed like it. People were shutting down by 2 o'clock Eastern Time," a trader said. "It's getting pretty light."

Bank and financial bonds were unchanged to slightly wider, a source said.

"Large banks were 1 to 5 wider. Some of the euro banks widened out as much as 8 basis points," a trader said.

Lloyds TSB Bank plc's notes sold the previous day firmed 3 basis points to 5 bps in the secondary market, the trader said.

New bonds that Chevron Phillips Chemical Co. LLC and Public Service Co. of Oklahoma sold a day earlier firmed in trading.

Utility spreads were mixed after the new deals on Thursday, a trader said.

"They were 3 wider to 3 tighter - the new issues would've been tighter."

The Markit CDX Series 14 North American investment-grade index firmed 2 bps to a spread of 83 bps, Markit Group Ltd. said.

Treasuries were mixed on Friday, sending yields on the longer end of the curve up. The 10-year note yield rose 3 bps to 3.33%, and the 30-year bond yield increased 3 bps to 4.53%.

JPMorgan sells $3.25 billion

JPMorgan Chase sold $3.25 billion of notes (Aa3/A+/AA-) in two parts by late afternoon, an informed source said.

The $1.25 billion of 2.05% three-year notes priced at a spread of Treasuries plus 110 bps.

A second tranche of $2 billion of three-year floating-rate notes priced at par to yield Libor plus 80 bps.

J.P. Morgan Securities LLC was the bookrunner.

In the secondary market, the notes were seen offered at 106 bps, a trader said.

The financial services company is based in New York.

Lloyds tighter

Both tranches that Lloyds TSB Bank sold firmed in secondary trading on Friday.

Lloyds TSB Bank priced $4.75 billion of senior notes (Aa3/A+/AA-) in two tranches on Thursday.

The 4.875% notes due 2016 priced at Treasuries plus 300 bps and were seen late Friday at 295 bps bid, 291 bps offered, a trader said.

The tranche of 6.375% notes due 2021 priced at 312.5 bps over Treasuries. "This morning they were at 309, 305," the trader said.

The bank is based in London.

Chevron Phillips narrows

Chevron Phillips Chemical's 4.75% 10-year notes (Baa1/BBB) sold on Thursday to yield Treasuries plus 150 bps firmed more than 7 bps in secondary trading.

The notes tightened to 143 bps, 138 bps offered Friday afternoon, a trader said.

The petrochemical company is based in the Woodlands, Texas.

Public Service firms

Public Service Co. of Oklahoma's notes also were tighter.

The Tulsa-based electric utility priced $250 million of 4.4% 10-year senior notes, series I, (Baa1/BBB/BBB+) at a spread of 115 bps over Treasuries.

Activity was seen early Friday in the notes, with a 114 bps bid, 111 offer, a trader said.

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