Primary empties at end of $20 billion week; more to come; spreads widen; GE Capital weaker

By Andrea Heisinger and Cristal Cody

New York, May 4 - After four busy days in the high-grade bond market and with the emergence of unemployment data, the primary emptied on Friday.

There was $22.91 billion of bonds priced in 23 deals throughout the week, according to Prospect News data. That amount exceeded expectations of between $15 billion and $20 billion and dwarfed the previous week's volume of $10.76 billion in 13 offerings.

Employment numbers were released for April and while there were jobs added and unemployment declined, growth was considered weak.

Syndicate sources said late Friday that the issuers for the coming week were unclear, but that it would be busy.

"It's looking kind of like this week," one source said, "maybe $15 [billion] to $20 [billion]."

A second source said it was looking the "same" as the past week, and deals would be spread throughout again instead of clumping in the first two or three days.

This source gave the total as between $20 billion and $25 billion.

High-grade bond spreads widened over the day, sources said. The Markit CDX Series 18 North American investment-grade index eased 3 basis points to a spread of 99 bps.

"Spreads were out today," a trader said. "The whole uncertainty of what's going on in Europe, everyone is sizing up for the weekend."

General Electric Capital Corp.'s bonds traded wider along with the bank and financial sector.

ABB Finance (USA) Inc.'s new five- and 10-year notes tightened, while the 30-year bonds widened.

GlaxoSmithKline Capital plc's new debt traded tighter on the offer side.

Telefonaktiebolaget LM Ericsson (publ)'s bonds sold earlier in the week continue to stay firmer in trading.

Treasuries ended stronger on Friday after the weaker job data. The benchmark 10-year note yield fell to 1.88% from 1.93%. The 30-year bond yield dropped 5 bps to 3.07%.

ABB mixed

ABB Finance's $2.5 billion of notes (Aa3/A/) sold in three tranches the previous day traded better on Friday, a source said.

"From earlier this morning but after Treasures had rallied, the five-year was 84, 81," a trader said.

ABB Finance sold $500 million of the 1.625% notes due 2017 at a spread of 95 bps over Treasuries.

The tranche of 2.875% notes due 2022 traded better at 115 bps bid, 112 bps offered. ABB Finance sold $1.25 billion of the 10-year paper at Treasuries plus 120 bps.

The 4.375% 30-year bonds traded wider at 131 bps bid, 128 bps offered. The issue priced in a $750 million offering at Treasuries plus 145 bps.

The unit of the power and automation technology company is based in Norwalk, Conn.

GE Capital widens

General Electric Capital's 2.3% notes due 2017 priced about a week ago traded 3 bps wider on Friday, a trader said.

"Yesterday, they were at 140 and they were bid today at 143," the trader said.

General Electric Capital sold $2 billion of the notes (A1/AA+/) priced at a spread of Treasuries plus 150 bps on April 24.

The financial products and services provider is based in Norwalk, Conn.

Glaxo trading

GlaxoSmithKline Capital's $5 billion of notes (A1/A+/A+) priced in three tranches on Wednesday were seen tighter on the offer side in secondary trading, a source said on Friday.

The 0.75% notes due 2015 traded at 38 bps offered. The $1 billion offering priced at a spread of Treasuries plus 45 bps.

The tranche of 1.5% notes due 2017 traded at 71 bps offered. GlaxoSmithKline Capital sold $2 billion of the five-year notes at 75 bps over Treasuries.

Also in trading, the 2.85% notes due 2022 traded at 97 bps offered early on Friday. The tranche priced in a $2 billion offering at Treasuries plus 100 bps.

The global health care and pharmaceutical company is based in Brentford, U.K.

Ericsson tightens

Telefonaktiebolaget LM Ericsson's 4.125% notes due 2022 traded tighter on Friday, a trader said.

"Saw an odd lot this morning at 210 over," the trader said. "They were quoted late yesterday at 210, 207."

LM Ericsson sold $1 billion of the 10-year notes (A3/BBB+/) at a spread of 225 bps over Treasuries on Wednesday.

The telecommunication and data communications company is based in Stockholm.

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