Quiet week forecasted with all eyes on Fed; credit spreads widen; Dow Chemical bonds weak

By Aleesia Forni and Cristal Cody

New York, Dec. 11 – The high-grade primary market was silent on Friday, closing out a week that saw roughly $33.8 billion of supply, with nearly half of that total coming from Visa Inc.’s $16 billion jumbo acquisition deal.

The market’s backdrop was “not pretty” to end the week, with oil prices setting a new seven year low on Friday ahead of next week’s all-important Federal Reserve interest rate decision.

Meanwhile, corporate investment-grade bond funds saw $1.55 billion of outflows for the week ended Dec. 9, according to Lipper U.S. Funds Flows.

The number follows last week’s $54.7 million of outflows and brings the year-to-date total to roughly $11.8 billion.

Investment-grade credit spreads widened on Friday. The Markit CDX North American Investment Grade 25 index opened the session 2 bps softer and closed a total of 9 bps weaker at a spread of 97 bps.

In the secondary market, Dow Chemical Co.’s notes (Baa2/BBB/BBB) weakened after the company announced it will merge with DuPont Co.

Bank and financial paper traded mostly better over the day.

Morgan Stanley’s 4% senior notes due 2025 firmed 2 bps.

JPMorgan Chase & Co.’s 4.25% subordinated notes due 2027 tightened 4 bps.

Bank of America Corp.’s 3.875% senior notes due 2025 traded 3 bps tighter in the secondary market.

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