Rentenbank brings add-on to close quiet week; high-grade volume low; AT&T bonds active

By Cristal Cody and Aleesia Forni

Virginia Beach, Jan. 3 - The high-grade primary market ended the second session of the new year on yet another quiet note on Friday, though the day did see an add-on priced by Germany's Landwirtschaftliche Rentenbank.

One market source noted that he was "not surprised" by the lack of activity during Friday's session.

"We weren't expecting anything today," he noted.

The only action during the day came with Rentenbank's tap of its existing floating-rate notes due Dec. 5, 2018.

The $200 million add-on was priced at 100.006 to yield Libor plus 11 basis points.

Sources continue to expect activity in the primary market to resume in the week ahead, with one source predicting around $20 billion of supply for the first full week of 2014.

Bond spreads ended the day slightly better, with the Markit CDX North American Investment Grade series 21 index 1 bp tighter at a spread of 62 bps.

Investment-grade volume was extremely low at about $4 billion on the day, according to a market source.

"It was definitely on the quiet side today," a trader said.

AT&T Inc.'s bonds remain active in the light trading, according to market sources.

Rentenbank add-on

Landwirtschaftliche Rentenbank tapped its existing issue of floating-rate notes (Aaa/AAA/AAA) due Dec. 5, 2018 to add $200 million in Friday's session, according to an informed source.

The notes have a coupon of Libor plus 11 bps and were priced at 100.006.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. were the bookrunners.

The notes are guaranteed by the Federal Republic of Germany.

The German development agency for agribusiness is based in Frankfurt.

AT&T trades

In the secondary market, AT&Ts 5.35% bonds due 2040 (A3/A-/A) traded on Friday at 152 bps bid, according to a trader.

The bonds traded as low as 98.77 and as high as 102.7 over the day, a market source said.

AT&T sold $3.5 billion of the bonds in 2011 at 99.793 to yield 5.364%.

The telecommunications company is based in Dallas.

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