Just $5.9 billion in new supply hit the investment grade market (only $3.9 billion excluding AAA EETCs and Supranational borrowers) in one of the quietest weeks of the year. The pattern of issuance was similar to the previous week with many off-the-run borrowers accessing the market with smaller size deals. This was the second week in a row that the average deal size was less than $400 million. With the market fixated on the volatility in turbulent sectors like telecom (WorldCom dropped about 20 points on the week and Qwest was down 3 or 4) and other benchmark borrowers like Tyco, there is little appetite for adding to risk positions. Add in the fact that it was an active week for bid lists, with several hundred million bonds dumped onto dealer books, and the near-term technical position of the market remains poor.
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