Corporate Bond Traders Await Next Week's Issues
May 19, 2011
No corporate deals were priced, while federal agencies brought about $400 million to market. There was about $1.3 billion in new corporate issues for the week. In Friday's secondary markets, investment-grade spreads shadowed the Treasury market and ended the day mostly unchanged. Junk bond prices advanced 1/2, rising with the Treasury and stock market. Meanwhile, syndicate officials are preparing for a busy calendar, with up to $5 billion in high-grade offerings and $1.5 billion in junk deals expected to be priced next week. In ratings action, Moody's Investors Service upgraded Sprint's senior long-term debt ratings to single-A3 from Baa1. Following the news, Sprint's 8 1/8 notes due 2017 tightened 0.02 percentage point to a spread of 0.54 percentage point above Treasurys, traders said. In secondary trading on the high-yield side, Nextel Communications' debt rose, despite being placed on Moody's review Friday for possible downgrade. Nextel's 9 3/4% senior redeemable discount notes due 2019 rose 1/2 to 60. The volatile issue was as high as 60 1/2 before it was put on review by Moody's, but the news came too late in the day to have a significant effect. According to Moody's, ``the review is prompted by Nextel's recent decision to raise $1.55 billion in secured bank financing to support the company's national roll out of its digital SMR network and the resulting effective subordination of the rated issues.'' SMRs refer to specialized mobile radios, such as those used by trucking companies. Moody's rates Nextel's debt single-B3, while Standard & Poor's Ratings Group rates it lower at triple-C-minus. In the supermarket sector, two junk-rated companies saw their prices rise as buyers went bottom fishing, market players said. Prices on Penn Traffic's 10 1/4% senior notes due 2017 rose 1 point to 88 1/2. The supermarket's debt had been sliding since Wednesday when it reported a 3.6% drop in second-quarter same-store sales. And Ralphs Grocery's 11% senior subordinated notes due 2020 advanced 1/2 to 97 1/2.
VastPress 2011 Vastopolis
