Strong high-grade supply forecast; market eyes Bayer deal; Walmart considers offering

By Cristal Cody

Tupelo, Miss., June 15 – The high-grade bond primary market stayed quiet on Friday ahead of what is expected to be a hefty week of issuance.

About $35 billion to $40 billion of volume is forecast for the upcoming week with a Rule 144A and Regulation S deal from Bayer AG (Baa1/BBB/A-) in focus after the company wrapped a three-day round of fixed income investor calls on Friday, a source said.

Also coming up on Monday, Walmart Inc. will hold fixed income investor calls.

Issuers ended up beating syndicate supply forecasts this week with more than $24 billion of investment-grade bonds sold. Market sources had expected about $15 billion to $20 billion of new issuance.

Investment-grade bonds priced over the week were mixed in secondary trading, a source said.

Concho Resources Inc.’s $1.6 billion of 10- and 30-year guaranteed senior notes (Baa3/BBB-/BBB-) that priced on Thursday traded wrapped around issuance.

The Markit CDX North American Investment Grade 30 index closed slightly tighter at a spread of 61 basis points.

Walmart (Aa2/AA/AA) plans to hold fixed income investor calls on Monday for a potential deal, according to a market source.

Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the arrangers.

The discount retailer is based in Bentonville, Ark.

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