High-grade supply quiet; credit spreads ease; Japan Finance starts roadshow

By Cristal Cody

Tupelo, Miss., Jan. 27 – Investment-grade issuers stood down on Monday with no corporate or sovereign, supranational and agency issuance reported priced during the session as credit spreads widened.

Syndicate sources attributed the lack of bond supply to growing concerns over a deadly coronavirus that’s spread from China.

The Markit CDX North American Investment Grade 33 index softened to a spread of 49.45 basis points from 46.7 bps on Friday.

Stocks closed down more than 1% with the Dow Jones industrial average off by 1.57%, while Treasury yields fell on risk-off demand.

About $20 billion to $25 billion of high-grade volume was forecast for the week.

Meanwhile on Monday, Japan Finance Organization for Municipalities (A1/A+/) kicked off a roadshow for a dual currency bond deal that includes Rule 144A and Regulation S dollar-denominated green bonds and a debut offering of euro-denominated notes.

J.P. Morgan Securities plc, Mizuho Securities Co., Ltd., Merrill Lynch International and Barclays are the bookrunners.

Also, a possible offering from Federation des caisses Desjardins du Quebec (A2/A+/AA-) is being eyed, according to market sources.

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