Primary action thins; quiet next two weeks forecast; Citigroup, AT&T, Wells Fargo, Mylan ease

By Cristal Cody

Eureka Springs, Ark., June 15 – Investment-grade primary action mostly stalled on Wednesday, while high-grade bonds sold off over the session.

The Federal Reserve kept rates unchanged following the end of its two-day policy meeting on Wednesday. Market participants predict a low chance of a rate hike in July.

Primary action remains thin on the week; most desks had nothing on tap with the Federal Reserve’s policy statement due out on Wednesday, sources report.

“It’s really going to be a quiet next couple of weeks,” one syndicate source said. “Most folks tend to not like to go with any volatility. There’s certainly a lot of headlines with Brexit that are swirling, not to say any trades would go forward if the tone was right. We sold off pretty hard at the end of today. I think folks will want to see the Brexit results on the 23rd, and assuming the market is in a reasonable place at that point in time, we’ll see some action just before the holiday on the 4th.”

The Markit CDX North American Investment Grade index ended the day about 1 basis point softer at a spread of 85 bps.

In the secondary market, Citigroup Inc.’s 4.6% subordinated notes due 2026 widened about 8 bps on Wednesday.

AT&T Inc.’s 4.125% senior notes due 2026 eased 2 bps.

Earlier in the day, Wells Fargo & Co.’s 4.4% subordinated notes due 2046 were quoted 6 bps weaker in the secondary market.

Mylan NV’s 3.95% senior notes due 2026 traded 3 bps softer over the morning.

Citi weakens

Citigroup’s 4.6% notes due 2026 widened about 8 bps to 256 bps bid on Wednesday, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa3/BBB/A-) on March 1 at Treasuries plus 280 bps.

The banking and financial services copay is based in New York.

AT&T eases

AT&T’s 4.125% notes due 2026 (Baa1//A-) eased 2 bps on Wednesday to head out at 181 bps bid, a market source said.

The company sold a $900 million reopening of the bonds on May 3 at Treasuries plus 150 bps.

The notes originally were priced on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.

AT&T is a Dallas-based telecommunications company.

Wells Fargo widens

Wells Fargo’s 4.4% notes due 2046 traded 6 bps weaker early on Wednesday at 204 bps offered, according to a market source.

Wells Fargo sold $2 billion of the notes on June 7 at a spread of 188 bps over Treasuries.

The financial services company is based in San Francisco.

Mylan softens

Mylan’s 3.95% notes due 2026 traded 3 bps softer at 243 bps offered earlier in the day, according to a market source.

Mylan sold $2.25 billion of the notes (Baa3/BBB-/BBB-) on May 31 at Treasuries plus 220 bps.

The pharmaceutical company is based in Hatfield, Hertfordshire.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.