High-grade primary quiet with focus on year-end activities; Disney mixed; Microsoft firms

By Cristal Cody

Eureka Springs, Ark., Dec. 20 – Investment-grade bond market activity continues to slow ahead of the Christmas holiday and final week of 2016, with little activity reported on Tuesday.

“Wrapping up doing some year-end things and getting ready for the next year,” one syndicate source said of the session.

No additional bond issuance is expected until 2017, but the first two weeks of the new year “should be probably pretty busy,” the source said.

The bond markets will close early on Friday and will be closed on Monday for the Christmas holiday.

The Markit CDX North American Investment Grade index closed the day about 1 basis point tighter at a spread of 67 bps.

The three-month Libor yield rose 1 bp to hit 100 bps on Tuesday.

Walt Disney Co.’s notes (A2/A/A) were active but mixed in secondary trading.

The company’s 1.85% notes due 2026 eased about 1 bp to 65 bps bid, according to a market source, and its 3% bonds due 2046 tightened 6 bps to head out at 87 bps bid.

Microsoft Corp.’s 2.4% senior notes due 2026 firmed 3 bps to 67 bps bid in secondary trading on Tuesday.

Wells Fargo Bank NA’s 1.8% notes due 2018 were seen in early secondary trading at 61 bps offered. The bank sold the notes on Dec. 1 at a spread of 70 bps.

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