Thin high-grade supply on tap; short-term flows improve; Toyota, Honda notes firm

By Cristal Cody

Tupelo, Miss., June 28 – The high-grade primary market ended Friday on a quiet note with June volume at just under $83 billion.

Supply slowed mid-week and is expected to remain thin in the holiday week ahead, market sources report.

More than $10 billion of corporate bonds priced over the week, while sovereign, supranational and agency issuers stayed to the sidelines with no dollar-denominated issuance reported.

About $15 billion of issuance was expected by syndicate sources for the week.

Looking to the upcoming week, the bond markets will close early at 2 p.m. ET on Wednesday and remain closed on Thursday for the Independence Day holiday.

Up to $5 billion of supply is eyed with any issuance likely to hit the primary market in the first two sessions, sources said.

High-grade issuance in July is pegged to total in the $75 billion to $80 billion range, according to market sources.

In the secondary market, new issues priced this week traded mostly better, market sources said.

Toyota Motor Corp.’s $1.5 billion of fixed-rate senior notes that priced in three tranches headed out about 2 bps to 9 bps tighter.

American Honda Finance Corp.’s $1.75 billion three-tranche offering of medium-term notes (A2/A) that priced on Monday traded about 1 bps to 8 bps better than issuance.

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