Morning Commentary: High-grade bonds mixed; Stryker notes tighten; Citigroup unchanged

By Cristal Cody

Tupelo, Miss., Oct. 27 – Investment-grade bonds were mixed in early secondary trading on Tuesday as traders kept an eye on the outcome from the Federal Reserve’s two-day policy meeting that ends on Wednesday.

Stryker Corp.’s 3.375% senior notes due 2025 traded 7 basis points better than where the bonds priced on Monday.

Citigroup Inc.’s 4.45% subordinated notes due 2027 reopened on Friday were flat but traded about 3 bps tighter than where the paper priced.

Over the previous session, $14.4 billion of high-grade issues traded, according to Trace.

The Markit CDX North American Investment Grade 25 index was last seen 1 bp tighter at a spread of 78 bps on Monday. The index has ranged from a low spread of 60.7 bps to a high spread of 94.8 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

Stryker firms

Stryker’s 3.375% senior notes due 2025 tightened to 125 bps offered in secondary trading, a source said.

The company sold $750 million of the notes on Monday (A3/A+) at a spread of Treasuries plus 132 bps.

Stryker is a medical technology company based in Kalamazoo, Mich.

Citi paper steady

Citigroup’s 4.45% subordinated notes due 2027 traded unchanged at 230 bps offered early Tuesday, a market source said.

Citigroup sold $1.5 billion of the notes (Baa3/ BBB+/A-) in a reopening on Friday at 233 bps over Treasuries.

The company originally sold $2 billion of the notes on Sept. 23 at Treasuries plus 235 bps.

The banking and financial services company is based in New York.

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