The calendar heated up substantially as pent up supply from September hit the market. Ford hit the market with a $3 billion transaction that quickly grew to $9.4 billion, the 5th largest corporate bond transaction ever done. Between the rating downgrades earlier in the week and the subsequent deal pricing, Ford spreads widened as much as 40 bp. Spreads tightened after the deal was priced as they did for the other jumbo of the week, BellSouth. The technical situation in the market steadily deteriorated, however, with dealers taking more and more paper in on swap. By the time the GM deal was announced after the close on Wednesday, secondary spreads were already under pressure. The GM deal sealed it with auto spreads and other high beta names widening 10-20 bp.
For additional information, please go to www.creditsights.com or call 212-340-3854