Morning Commentary: Cisco notes tight in secondary trading; Reynolds American long bonds ease

By Cristal Cody

Tupelo, Miss., June 12 – New investment-grade bonds were mixed in secondary trading at the start of Friday’s session, according to market sources.

Cisco Systems, Inc.’s senior notes (A1/AA-/) that priced on Wednesday traded about 3 basis points to 6 bps better in the secondary market.

Reynolds American Inc.’s 5.85% senior notes due 2045 traded 5 bps weaker.

The three-month Libor yield was stable at 29 bps.

The Markit CDX North American Investment Grade series 23 index was unchanged at spread of 66 bps.

Cisco better than issuance

Cisco Systems’ 1.65% notes due 2018 were seen at 51 bps offered early Friday, a market source said.

The company sold $1.6 billion of the notes on Wednesday at Treasuries plus 55 bps.

Cisco’s 2.45% notes due 2020 were quoted better at 67 bps offered in trading. The notes priced in a $1.5 billion offering on Wednesday at Treasuries plus 70 bps.

Cisco’s 3.5% notes due 2025 traded better at 99 bps offered.

The company sold $500 million of the notes in Wednesday’s offering at Treasuries plus 105 bps.

San Jose, Calif.-based Cisco produces internet protocol-based networking and other communications and information technology products.

Reynolds American soft

Reynolds American’s 5.85% bonds due 2045 eased 5 bps to 252 bps offered, according to a market source.

The company sold $2.25 billion of the bonds (Baa3/BBB-) on Tuesday at a spread of Treasuries plus 270 bps.

Reynolds American is a Winston-Salem, N.C.-based manufacturer and marketer of cigarettes and other tobacco products.

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