Morning Commentary: Investment-grade bond spreads narrow; Citi firms; Coca-Cola flat

By Cristal Cody

Tupelo, Miss., Aug. 14 – High-grade bond spreads edged tighter early Thursday after bonds unwound most of the week’s softness in the previous session, according to a market source.

The Markit CDX North American Investment Grade series 22 index firmed 3 basis points to a spread of 60 bps on Wednesday.

The CDX was quoted modestly tighter at 59.9 bps over the morning ahead of the release of the weekly unemployment report. The Labor Department reported that initial jobless claims rose 21,000 in the week ended Aug. 9 to a seasonally adjusted 311,000, well above the 295,000 forecast.

In the secondary market, Citigroup Inc.’s 4% subordinated notes due 2024 traded about 2 bps better, a market source said.

Coca-Cola Co.’s 3.2% senior notes due 2023 were flat after widening in heavier trading volume on Wednesday, a source said.

Citi improves

Citigroup’s 4% notes due 2024 (Baa2/A-/A) firmed 2 bps to 168 bps offered, a source said early Thursday.

The notes had widened from where the paper traded on Friday at 166 bps offered.

Ctiigroup sold $750 million of the 10-year notes at Treasuries plus 157 bps on July 29.

The bank is based in New York.

Coca-Cola unchanged

Coca-Cola’s 3.2% notes due 2023 (Aa3/AA-/A+) traded flat at 61 bps offered after the bonds eased 3 bps in the previous session, a market source said.

Coca-Cola sold $1.5 billion of the 10-year notes at Treasuries plus 70 bps on Oct. 29, 2013.

The beverage company is based in Atlanta.

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