Week tops issuance estimates; steady deal flow to continue; trading slows; bank paper flat

By Andrea Heisinger and Cristal Cody

New York, March 23 - The primary side of the high-grade bond market slowed to a halt on Friday following a week with a solid, if not constant, flow of deals.

The tone took a downturn on Thursday, which saw only a couple of deals price, one of which was in the preferred stock market.

There weren't any new deals for Friday, a syndicate source said late in the day, but Monday should see a return of bond sales.

"We'll have one or two looking," the source said.

The week is expected to have $15 billion to $20 billion of issuance, which was similar to the past week's total. It should be more evenly spaced rather than packed into two days, the source said.

"We'd prefer it slow and steady."

According to Prospect News data, issuers priced $20.64 billion of notes during the past week in 33 deals, which was on the upper end of the expected range.

Secondary trading activity slowed on Friday. Overall trading volume was about $7.4 billion.

"A little lowish," a source said. "I didn't have much flow at all. It's pretty quiet on everything today."

The Markit CDX Series 18 North American Investment Grade index eased 1 basis point to a spread of 91 bps.

Bank and financial paper traded mostly unchanged on the day, including the new issues priced earlier in the week.

American Express Credit Corp.'s five-year notes were mostly flat in trading.

Lloyds TSB Bank plc's five-year notes widened on the offer side.

Raymond James Financial, Inc.'s 12-year notes have stayed stronger in secondary trading.

Morgan Stanley's 5.5% notes due 2021 that led weakness in the sector on Thursday traded unchanged on Friday at 360 bps bid, according to sources.

Treasuries closed Friday higher for a fourth day. The benchmark 10-year Treasury note yield fell 5 bps to 2.23%. The 30-year bond yield dropped 6 bps to 3.3%.

American Express flat

American Express Credit's 2.375% senior notes due 2017 were offered early Friday at 131 bps bid, a trader said.

The notes had eased 3 bps to 133 bps bid, 130 bps offered in the secondary market on Thursday.

American Express Credit sold $1.5 billion of the notes (A2/BBB+/A+) at Treasuries plus 130 bps on Wednesday.

The financial services company is based in New York.

Raymond James tighter

Raymond James Financial's 5.625% senior notes due 2024 (Baa2/BBB/) continue to trade better and were quoted at 330 bps offered on Friday, a trader said.

Raymond James Financial sold $250 million of the notes at a spread of Treasuries plus 337.5 bps on Wednesday.

The financial services holding company is based in St. Petersburg, Fla.

Lloyds notes widen

Lloyds TSB Bank's 4.2% senior notes due 2017 widened to 307 bps offered early Friday, a trader said in the late afternoon.

The notes were quoted on Thursday at 308 bps bid, 304 bps offered.

Lloyds sold $1.5 billion of the five-year notes (Aa3/A+/AA-) to yield Treasuries plus 310 bps on Wednesday.

The retail bank is based in London and Edinburgh.

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