Morning Commentary: High-grade bonds mixed in early trading; Citigroup firms; McDonald’s softens

By Cristal Cody

Tupelo, Miss., Dec. 24 – High-grade bonds opened Thursday mixed in light secondary trading with desks thinly staffed for the short market week.

Citigroup Inc.’s 2.65% notes due 2020 traded 5 basis points better over the morning after tightening 3 bps in the previous session.

McDonald’s Corp.’s 4.875% senior notes due 2045 eased 2 bps.

The three-month Libor yield was stable at 59 bps.

About $5.2 billion of investment-grade issues traded on Wednesday, down from $8.5 billion on Tuesday, according to Trace.

Citigroup tightens

Citigroup’s 2.65% notes due 2020 firmed 5 bps in early secondary trading to 104 bps offered, a market source said.

The notes headed out on Wednesday 3 bps tighter at 110 bps bid.

Citigroup sold $2.7 billion of the notes (Baa1/A-/A) on Oct. 19 at a spread of Treasuries plus 133 bps.

The financial services company is based in New York.

McDonald’s eases

McDonald’s 4.875% bonds due 2045 softened 2 bps in the secondary market to 189 bps offered, a source said.

The bonds (Baa1/BBB+/BBB+) priced in a $1.75 billion tranche on Dec. 2 at 195 bps over Treasuries.

The fast food chain is based in Oak Brook, Ill.

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