Primary to slow in week ahead; CVS tightens; State Street, HSBC ease; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., May 20 – Investment-grade primary action is expected to slow in the upcoming week after more than $50 billion of bonds priced through Thursday, led by Dell Inc.’s $20 billion offering on Tuesday.

“We’re saying $20 [billion] to $25 [billion] next week,” one syndicate source said.

The week’s issuance is expected to be front-loaded ahead of the Memorial Day holiday.

High-grade issuers took a break on Friday with no deals priced.

In secondary trading, CVS Health Corp.’s $3.5 billion of senior notes (Baa1/BBB+) sold on Monday continued to tighten about 1 basis point to 2 bps over the last two sessions, going out on Friday 3 bps to 5 bps better than pricing.

State Street Corp.’s new 2.6% senior notes due 2026 headed out on Friday 2 bps softer than issuance.

HSBC Holdings plc’s subordinated notes (A1/A/AA-) priced on Wednesday traded 1 bp weaker than issuance.

The Markit CDX North American Investment Grade index firmed 1 bp on Friday to close at a spread of 84 bps.

CVS Health’s 2.875% notes due 2026 traded better at 119 bps bid, 116 bps offered in the secondary market, a source said on Friday.

The 10-year notes were sold on Monday in a $1.75 billion tranche at a spread of 122 bps over Treasuries.

The pharmacy retailer is based in Scarsdale, N.Y.

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