High-grade primary empty in light of Fed; Boeing flat; Citigroup eases; Walgreens improves

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 28 – The investment-grade primary market took a breather on Wednesday, with participants focused on the conclusion of the Federal Open Market Committee’s two-day policy meeting.

The Fed elected to hold interest rates steady at the near-zero level, citing slower job gains in its statement following the meeting.

Additionally, a line regarding global and financial developments restraining economic activity and putting downward pressure on inflation was removed from the statement.

The decision by the Federal Reserve came as no surprise to most market players, with one source adding that he also does not expect an interest rate hike to come following the December policy meeting.

Primary activity is likely to resume in the session ahead, with issuers taking advantage of solid market conditions prior to what is predicted to be a busy month of November.

So far, the week has seen $15.85 billion of new high-grade paper price, closing in on what was predicted to be $20 billion of supply.

Boeing Co.’s new 2.6% senior notes due 2025 (A2/A/A), which priced on Tuesday, traded wrapped around issuance.

Citigroup Inc.’s new 4.45% subordinated notes due 2027 headed out softer.

Walgreens Boots Alliance Inc.’s 3.8% senior notes due 2024 tightened more than 10 bps on Wednesday after the bonds widened in the previous session on the news it plans to buy Rite Aid Corp. in a deal valued at $17.2 billion.

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