US corporate bond spreads were generally wider on Friday in light trading as some investors took profits at the end of the quarter, traders said. Overall high-grade bond spreads widened slightly after narrowing about 2 basis points this week to trade at about 149 basis points, according to Merrill Lynch data.
High-yield bonds traded mixed in light trading, according to KDP Investment Advisors. Among high-yield names, bonds of EchoStar rose 1 to 2 points on rumours of an AT&T buyout, KDP said. Home builders were mixed after KB Homes announced weak operating results but also announced debt reduction plans and increases in cash balances, KDP analyst Brian Bogart co-wrote in a report.
Among actively traded bonds, debt of investment banks Bear Stearns Cos and Goldman Sachs were weaker on Friday. Bear's 6.4 percent notes maturing in 2017, the most actively traded on Friday, widened by 6 basis points to 191 basis points over US Treasuries, according to MarketAxess.
Goldman's 6.75 percent notes maturing in 2037, the second most actively traded, widened by 2 basis points to 191 basis points over Treasuries. In the high-yield market this week, First Data Corp sold $9.445 billion of its $13 billion term loan backing the company's $26 billion leveraged buyout, sources told Reuters Loan Pricing Corp on Thursday.
A $9 billion bond sale planned as part of that deal remains to be sold. While a credit crunch that gripped debt markets this summer has stalled bond sales, high-grade US corporate bond issuance rose in the year-to-date period to $772 billion, up 10 percent from $700 billion in the same period a year ago, Thomson Financial reported on Friday. Junk bond sales totalled $104 billion so far this year, up 17 percent from $89 billion a year ago, Thomson said.
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