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Investment-grade primary market quiet; bank, financial paper mixed in secondary; BB&T firms
By Cristal Cody
Tupelo, Miss., June 14 – Investment-grade bond issuers stayed mostly to the sidelines on Wednesday with the Federal Reserve announcing its rate decision, sources report.
The Federal Reserve raised the federal funds rate to 1% to 1.25%.
No U.S. high-grade issuers were seen in the primary market during the session, a source said.
About $11 billion of high-grade bonds have priced week to date. Syndicate sources forecasted about $20 billion to $25 billion of supply for the week.
The Markit CDX North American Investment Grade index tightened modestly to close at a spread of 59 basis points.
In the secondary market, bank and financial paper was mixed.
BB&T Corp.’s 2.75% senior medium-term notes due April 1, 2022 firmed 2 bps on Wednesday.
Mitsubishi UFJ Financial Group, Inc.’s 3.677% senior notes due Feb. 22, 2027 traded 5 bps wider.
Citibank, NA’s 2% notes due March 20, 2019 eased 5 bps.
BB&T firms
BB&T’s 2.75% notes due April 1, 2022 traded 2 bps tighter on Wednesday at 62 bps bid, a market source said.
The company sold $1 billion of the notes (A2/A-/A+) on March 16 at a spread of 75 bps over Treasuries.
The bank and financial services company is based in Winston-Salem, N.C.
MUFG eases
MUFG’s 3.677% notes due Feb. 22, 2027 traded 5 bps wider at 103 bps bid, a market source said.
The $1 billion tranche of 10-year notes (A1/A/A) priced on Feb. 15 at a Treasuries plus 118 bps spread.
The bank is based in Tokyo.
Citibank softens
Citibank’s 2% notes due March 20, 2019 eased 5 bps in the secondary market to 55 bps bid, according to a market source.
Citibank sold $1.5 billion of the notes (A1/A+/) on March 13 at a spread of Treasuries plus 67 bps.
The commercial and consumer banking products and services company is based in Sioux Falls, S.D.
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