US Bancorp (NYSE:USB)
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Two issuers placed jumbo deals in the high-grade corporate bond market Thursday, but new volume otherwise slowed down as participants digested a flurry of issuance from earlier in the week.
The financing arm of power and technology company ABB Ltd. (ABBN.VX) sold $2.5 billion in a three-part debt deal, while U.S. Bancorp. (USB) priced $1.25 billion in a single tranche of five-year debt.
The deals follow the fifth-busiest session for new issuance this year. Six large borrowers tapped the market Wednesday, pricing more than $12 billion of debt. With today's new deals, new issuance for the week is around $21 billion, according to Dealogic, making it the busiest week since late March.
April volume was subdued given renewed market volatility coupled with earnings-related "blackout" periods preventing companies from selling bonds. Investors who have been building up cash have been rewarding recent-issues with favorable pricing.
ABB priced its five-, 10-, and 30-year bonds at 95 basis points, 120 basis points, and 145 basis points respectively over comparable Treasurys. The respective yields were 1.772%, 3.129%, and 4.568%.
The U.S. Bancorp deal was sold at a yield of 1.689%, or 87.5 basis points over Treasurys.
Among smaller deals, Korea Western Power Co. sold a $500 million five-year bond at a yield of 235 basis points over comparable Treasurys, or 3.169%. The deal was at least five times oversubscribed.
Meanwhile, bonds weakened in the secondary market ahead of April's nonfarm payrolls report, due Friday at 8:30am EST.
The CDX North America Investment-Grade Index, a barometer of sentiment in the corporate bond market, deteriorated 1.9% in late trading.
-By Patrick McGee, Dow Jones Newswires; 212-416-2382; email@example.com