Midday Commentary: High-grade bonds extend move wider; JPMorgan flat; Broadridge firms

By Cristal Cody

Tupelo, Miss., Aug. 19 - Investment-grade bond spreads continued to widen on Monday, moving out 1 basis point to 2 bps on lighter volumes, according to market sources early in the session.

"Investment-grade market feels a little bit weaker this A.M.," a trader said. "Treasuries are also selling off as well."

The Markit CDX Series 20 North American Investment Grade index rose 2 bps on Friday to a spread of 82 bps.

"This morning, investment-grade credit spreads are extending the move wider that occurred at the tail end of last week and spreads currently sit at the widest level since early July," RBC Capital Markets, LLC analysts said in a note on Monday. "Higher rates appear to be causing credit investors some unease."

JPMorgan Chase & Co.'s 5.625% subordinated bonds due 2043 (A3/A-/A) traded basically unchanged in Monday's morning session at 200 bps bid, 195 bps offered after softening in secondary trading on Thursday, a trader said.

The New York City-based financial services company sold $750 million of the 5.625% bonds at a spread of Treasuries plus 190 bps on Wednesday.

In other trading early Monday, Broadridge Financial Solutions, Inc.'s 3.95% senior notes due 2020 (Baa1/BBB/BBB+) tightened 1 bps to 2 bps from Friday's secondary market to 180 bps bid, 176 bps offered, a trader said.

The Success, N.Y.-based provider of investor communication solutions, securities processing and operations infrastructure to the financial services industry and corporations sold $400 million of the notes on Wednesday at a spread of Treasuries plus 185 bps.

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