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By Will Caiger-Smith
NEW YORK, Feb 2 (IFR) - US high-grade corporates stood onthe sidelines on Tuesday as volatility intensified in broadermarkets on the back of more worries about earnings and globalgrowth.
With the Dow Jones industrial average opening 190 pointslower, 10-year Treasury yields dipping below 1.9% for the firsttime in 10 months, and the CDX IG 25 index 2.8bp wider at 106.8, at least two issuers had stood down, said one syndicate banker.
Bankers said the week's supply which was anticipated to beUS$15bn-US$20bn could fall short of these estimates ifvolatility continued to scare issuers away.
This week has been slow so far with just two - Starbucks andTurkexim Bank - selling US$1bn between them on Monday.
"We're still in the heart of the earnings blackout season soa lot of corporates are not even monitoring the market thatclosely," said one syndicate banker.
"It's more financials, but we take one step forward and twosteps back in terms of rates and equities volatility."
One credit analyst said worries about global growth wereintensifying.
"It started with worries about Chinese growth, then US andnow Europe with some weak profit numbers out this morning," saidone analyst.
British oil and gas company BP reported its biggest annualloss on Tuesday and announced job cuts, showing that even one ofthe nimblest oil producers is struggling in the worst marketdownturn in over a decade.
The price of Brent crude oil was down more than 5% onTuesday at US$32.5 a barrel.
Bankers said that though volatility had narrowed the windowfor issuance for now, there were still expectations of decentsupply once market conditions stabilized. Newly issued bondswere trading tighter than their issue price which showed theresilience of the market.
Starbucks' US$500m 2.1% 2021 bond, which priced at T+75bp onMonday was bid 4bp tighter at 71bp, another syndicate bankersaid. (Reporting by Will Caiger-Smith; editing by ShankarRamakrishnan)
