High-grade bonds mostly flat; credit spreads improve mildly; issuers stay away from market

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 25 – Sentiment in the investment-grade bond market was somewhat improved on Tuesday following a brutal Monday session.

Markets rebounded after China’s central bank cut interest rates in an attempt to boost the stuttering economy.

Despite the better tone, issuers once again steered clear of the investment-grade primary bond market for the second consecutive session.

With the late-August lull underway, the remainder of the week will likely remain empty of new issuance ahead of September’s expected deluge of supply.

Players will also be focused on the happenings of the Federal Open Market Committee’s two-day policy meeting during the month ahead and the possibility of the long-awaited liftoff.

Investment-grade bonds headed out mostly unchanged while credit spreads improved over the day.

AT&T Inc.’s 3.4% notes due 2025 traded flat on Tuesday.

In other trading, bank and financial paper was mostly unchanged.

Citigroup Inc.’s 3.3% senior notes due 2025 were stable over the session.

JPMorgan Chase & Co.’s 3.125% notes due 2025 were flat in secondary trading.

Goldman Sachs Group Inc.’s 3.5% notes due 2025 headed out unchanged.

The Markit CDX North American Investment Grade index opened the session 4 bps tighter at a spread of 84 bps and by late afternoon was seen ending the session 1 bp tighter at a spread of 87 bps. The index widened 5 bps on Monday to a spread of 88 bps, its steepest one-day widening since July 2013.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.