World Bank prices $500 million floaters; corporates quiet; Walmart notes firm; Bayer eases

By Cristal Cody

Tupelo, Miss., June 25 – Corporate bond issuers reportedly stayed out of the high-grade primary market on Monday, while the International Bank for Reconstruction and Development sold $500 million of floating-rate notes.

Syndicate sources forecast about $15 billion to $20 billion of bond supply this week with the potential for much less.

“Now supply volumes are set to slow seasonally to a weekly range of just $5-15 [billion], due to the Independence Day holiday and 2Q earnings season related blackouts, before picking up with bank issuance the third week of July,” according to a BofA Merrill Lynch note released Monday.

More than $43 billion of high-grade bonds came to the primary market last week, including two merger and acquisition-related debt deals from Bayer AG and Walmart Inc. Most of the bond offerings for deals set to close this summer are now completed, a source said.

In the secondary market, Bayer’s notes were mixed but quoted softer than issuance.

Walmart’s notes tightened on Monday.

Credit spreads widened over the session. The Markit CDX North American Investment Grade 30 index eased about 2 basis points to a spread of 67 bps.

Growing trade war fears remained in focus. Stocks ended the day lower. The Dow Jones Industrial Average closed off 328 points. Treasury yields also declined on Monday.

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