Midday Commentary: Time Warner Cable, Citigroup, Cummins bonds widen in early trading

By Cristal Cody

Tupelo, Miss., Sept. 23 - Investment-grade bonds opened Monday's session generally unchanged, with new issues slightly wider, according to market sources.

"Mostly unchanged this A.M.," a trader said. "Activity has been slow so far today, with the exception of Time Warner Cable."

Time Warner Cable Inc.'s bonds (Baa2/BBB/BBB) widened 3 basis points to 5 bps across the curve, the trader said.

New issues also eased off of previous gains in the secondary market. Citigroup Inc.'s paper widened, while Cummins Inc.'s two tranches of senior notes priced on Thursday traded flat to weaker.

The Markit CDX North American Investment Grade series 21 index ended Friday at a spread of 80 bps.

Citi eases

Citigroup's 2.5% notes due 2018 widened early Monday to 114 bps bid, 111 bps offered, a trader said.

Citigroup sold $1.75 billion of the five-year notes (Baa2/A-/A) with a spread of Treasuries plus 112 bps on Thursday.

The financial services company is based in New York.

Cummins weaker

Cummins' new senior notes (A3/A/A) traded flat to weaker in the morning session, a trader said.

The tranche of 3.65% senior notes due 2023 was quoted mostly unchanged at 90 bps bid, 87 bps offered from where the notes were seen on Friday at 90 bps bid, 86 bps offered.

The company sold $500 million of the 10-year notes with a spread of Treasuries plus 97 bps on Thursday.

The tranche of 4.875% bonds due 2043 widened to 101 bps bid, 98 bps offered early Monday from where the notes traded on Friday at 98 bps bid, 93 bps offered.

Cummins sold $500 million of the bonds at Treasuries plus 117 bps.

The Columbus, Ind.-based company designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products.

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