By Hillary Flynn
NEW YORK, May 6 (IFR) - The US investment-grade bond marketis gearing up for a busy week with bankers forecasting as muchas US$40bn of supply as more corporates emerge from blackout.
Weaker markets on Friday in the wake of disappointing nonfarm payrolls data kept issuers on the sidelines on Friday,but the week's volumes of US$29.5bn still well surpassedexpectations after a late surge in bond sales.
Among potential issuers next week could be food giant Kraft Heinz Foods, which has mandated Barclays, JP Morgan,Goldman Sachs and Morgan Stanley to hold calls with investors onMonday for a potential euro or sterling deal.
It also plans to hold calls with the buyside for a possibledollar deal.
"We have four to five trades looking at next week. We expectUS$35bn area at least," one syndicate banker said.
Stocks and credit derivative indices initially sold offafter softer-than-expected April payrolls data. The CDX IG 26index turned around later to trade 0.4bp tighter at 84.25bp,according to MarketAxess.
Nonfarm payrolls increased by 160,000 jobs last month, farbelow the 202,000 economists polled by Reuters had forecast onaverage. The number was lower than the first-quarter averagemonthly job growth of 200,000.
New issues from this week put in a mixed performance insecondary.
Barclays's 10-year subordinated bond was trading 5bp insidereoffer at T+340bp, while BNP Paribas' 10-year sub bond was 3bpinside reoffer at T+262bp, according to MarketAxess.
But the two longest dated tranches of Royal Dutch Shell'sUS$7.25bn four-part issue which priced Thursday, were trading4-6bp wider in secondary markets, according to MarketAxess data.
"It priced tight and the market is under pressure today,There's also a decent pipeline coming and I'm sure that's nothelping, said another banker on the Royal Dutch trade.
But bankers do not expect issuance plans to be derailedbecause of the soft jobs report.
"I don't think the payroll number will prevent any dealsfrom coming next week," another syndicate banker told IFR. (Reporting by Hillary Flynn; Editing by Natalie Harrison andShankar Ramakrishnan)
