950805

Corporate bond

prices stronger

NEW YORK: US high-grade corporate bond prices closed up after tracking US Treasuries throughout a mostly uneventful day, high-grades dealers said on Friday.

Spreads against Treasuries for most issues ended unchanged. "It's dead... just a nothing day," said one trader of today's market.

The only activity came this morning, when the corporate bond market fell a bit on news of a weaker-than-expected increase in US July non-farm payrolls.

While no new corporate issues came to market, several are set to price in the next week. Methanex Corp is set to issue a $400 million issue via lead manager Goldman Sachs & Co, market sources said.

The issue will have a $150 million seven-year tranche and $250 million 10-year notes, the source added. The notes are expected to be rated Ba1 by Moody's Investors Service Inc and BBB-plus by Standard & Poor's Corp.

In the junk bond market, prices closed unchanged after a volatile morning became increasingly quiet, dealers said.

"We had a wild and wooley ride this morning with Treasuries going up and down very quickly," said one junk bonds trader.

Trading in the secondary market was difficult, particularly higher-quality issues such as US Gypsum, Universal Health and Federated Department Stores, the trader added.

Late in the day, American Telecasting Inc priced $100 million of notes via lead manager Dillon Read & Co. The zero coupon notes priced at 14.5 percent, said a trader.

The notes are expected to be rated CCC by Standard & Poor's.

In governments, the 30-year long bond was up 8/32 at 108-29/32 to yield 6.91 percent.-Reuter