Light high-grade deal pipeline expected; bank paper flat; AT&T soft; Hewlett-Packard mixed

By Cristal Cody

Tupelo, Miss., Oct. 2 – Investment-grade issuers took a break on Friday after the market saw about $27 billion of high-grade supply over the week.

“It was slower than we expected just because of the market volatility,” one source said. “Next week should be light – probably around $10 to $15 billion.”

Treasuries rallied on the back of the Labor Department’s report that 142,000 jobs were added in September, well below the 201,000 forecasted for the non-farm payrolls report.

In secondary trading over the day, bank and financial paper was mostly flat to modestly weaker.

Bank of America Corp.’s 3.875% senior notes due 2025 were unchanged.

HSBC Holdings plc’s 4.25% subordinated notes due 2025 headed out flat.

AT&T Inc.’s 3.4% notes due 2025 traded 2 basis points wider over the day after improving 8 bps in Thursday’s session.

In earlier secondary trading, Hewlett-Packard Enterprise Co.’s new senior notes (Baa2/BBB/A-) were mixed.

The Markit CDX North American Investment Grade 25 index firmed 2 bps to end at a spread of 93 bps on Friday.

AT&T’s 3.4% notes due 2025 traded 2 bps wider over the day to head out at 196 bps bid, a market source said.

The notes (/BBB+/A-) were quoted about 1 bp softer at 191 bps offered at the start of the day.

The company sold $5 billion of the notes on April 23 at 150 bps over Treasuries.

The telecommunications company is based in Dallas.

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