Morning Commentary: Investment-grade bonds mixed ahead of supply; CBS, Kinder Morgan firm

By Cristal Cody

Tupelo, Miss., Jan. 12 – High-grade corporate bonds were mixed at the start of Monday’s session in front of strong primary supply expected later in the day, according to market sources.

Issuers including American International Group Inc., DDR Corp. and Brookfield Asset Management Inc. are set to tap the market.

In secondary trading, CBS Corp.’s 3.5% senior notes due 2025 brought in the previous week improved 3 basis points from Friday, a source said.

Kinder Morgan Energy Partners LP’s 4.3% senior notes due 2025 that priced in November traded 3 bps tighter, according to a market source.

The Markit CDX North American Investment Grade series 23 index ended on Friday 1 bp wider at a spread of 69 bps.

CBS firms

CBS’ 3.5% notes due 2025 firmed 3 bps to 153 bps offered, according to a market source.

CBS sold $600 million of the notes (Baa2/BBB/BBB) on Wednesday at a spread of Treasuries plus 160 bps.

The broadcasting company is based in New York.

Kinder Morgan better

Kinder Morgan Energy Partners’ 4.3% senior notes due 2025 traded 3 bps better at 202 bps offered, a market source said.

Kinder Morgan Energy Partners sold $1.5 billion of the notes (Baa3/BBB-/BBB-) at Treasuries plus 205 bps on Nov. 24.

The pipeline operator is based in Houston.

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