The US corporate bond market was little changed on Thursday as new issuance paused ahead of the Easter holiday weekend and the secondary market was quiet. The lull in new sales came after a relatively busy week in which around $11 billion of new debt was sold.
Some of this week's sales may be companies issuing debt before releasing earnings, said Mirko Mikelic, analyst at Fifth Third Asset Management. Issuance will likely slow next week as earnings releases pick up, he said.
Average investment-grade credit spreads continued to hold firm, ending Wednesday at 0.89 percentage point over Treasuries for the fourth consecutive session, according to Merrill Lynch.
In the secondary market, bonds of Adelphia Communications fell for the second day after the bankrupt cable company filed a new reorganisation plan on Wednesday that lowered the estimated amount bondholders will recover.
Adelphia's senior bondholders are expected to recover about 31 percent to 85 percent of their claims, down from previous estimates of 56 percent to 105 percent, according to the new plan.
The company's 10.25 percent bond due 2011 fell almost 2 cents to 51 cents on the dollar, according to MarketAxess. The bond has dipped from 63.2 cents on the dollar on Tuesday, before the plan was announced.
In other markets, benchmark Treasury yields rose above 5 percent for the first time in nearly four years as the prospect of tightening monetary conditions globally swept bond prices lower.
A batch of economic data, including retail sales and consumer sentiment, was sufficiently consistent with recent economic strength to suggest that the Federal Reserve will raise the fed funds rate at least once more at its May meeting, to 5 percent from its current 4.75 percent.
The benchmark 10-year Treasury note fell 14/32 to yield 5.04 percent, up from 4.98 percent on Wednesday.
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