Primary halts as year-end slowdown begins; Newell Rubbermaid weakens; credit spreads firm

By Aleesia Forni and Cristal Cody

New York, Dec. 14 – Investment-grade issuers stood down to open the week on Monday amid fragile market conditions prior to the start of the Federal Open Market Committee meeting.

Nerves continue to be heightened ahead of the Federal Reserve’s two-day policy meeting, which is widely expected to see the first lift-off in rates in nearly a decade.

Meantime, activity in the high-grade space was unsurprisingly quiet as the market winds down ahead of the end of the year.

Sources were predicting the possibility of only a small handful of new deals entering the primary market this week, with up to $5 billion of supply forecasted, though multiple sources noted that calendars were empty.

One market source noted that Monday was likely the only possible window for any new issuance this week and that activity is expected to resume in earnest at the start of the new calendar year.

Investment-grade bonds were mixed over the day, while credit spreads recovered some ground from Friday.

Newell Rubbermaid Inc.’s 3.9% senior notes due 2025 slipped 7 points in secondary trading after the company announced it will acquire Jarden Corp. in a deal valued at $15 billion, or $60 per share in cash and stock.

Visa Inc.’s new senior notes (A1/A+) traded weaker during the session.

The Markit CDX North American Investment Grade 25 index firmed 4 bps on Monday to close at a spread of 93 bps.

Newell Rubbermaid falls

Newell Rubbermaid’s 3.9% notes due 2025 dropped to 89.12 to yield 5.331% in secondary trading on Monday from 96.12 to yield 4.388% on Friday, according to a market source.

The company sold $300 million of the notes (Baa3/BBB-/BBB+) on Oct. 14 at 99.686 to yield 3.938%, or Treasuries plus 195 bps.

The consumer and commercial products maker is based in Atlanta.

Visa softens

Visa’s 2.2% notes due 2020 traded late Monday at 99.70, down from 100.21 on Friday, according to a market source.

The notes traded 7 bps wider at 60 bps bid earlier in the session, according to a market source.

Visa sold $3 billion of the notes on Wednesday at 99.915 to yield 2.218%. The notes priced at a spread of Treasuries plus 57 bps.

Visa’s 3.15% notes due 2025 traded lower at 99.35 on Monday from where the bonds headed out at 100.15 on Friday.

The notes were quoted 4 bps weaker earlier in the day at 99 bps bid.

The company sold $4 billion of the notes in Wednesday’s sale at 99.634 to yield 3.193%, or Treasuries plus 97 bps.

The retail electronic payments network operator is based in San Francisco.

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