Markets lurch on pandemic, oil prices; bond, credit spreads widen; Florida Power eyes deal

By Cristal Cody

Tupelo, Miss., March 9 – Investment-grade issuers stood down on Monday as the financial markets tumbled, bond spreads widened and credit spreads moved out more than 30 basis points on the day.

Florida Power & Light Co. offered 50-year registered floating-rate notes.

Otherwise, supply was quiet as stocks tanked and Treasury yields dropped to unprecedented levels on continuing and expanding coronavirus infections, slashed oil prices and growing concerns of a recession.

The Markit CDX North American Investment Grade 33 index widened to 113.67 bps from where it closed Friday at a spread of 82.75 bps.

In the same day a week ago, the index finished at a spread of 65.06 bps.

Stock indexes were down more than 7% on the day with trading halted for 15 minutes at the start of the session. The Dow Jones industrial average declined more than 1,300 points, or 5.2%, over the morning and ended the day down 2,013.76 points, or 7.79%.

Treasury yields fell 8 bps to 28 bps across the curve.

The benchmark 10-year Treasury note yield dropped 21 bps to a new all-time low of 0.499%.

Deal supply for this week is hard to forecast with the extreme volatility in the financial markets, sources report.

Bond volume totaled more than $27 billion last week, better than the up to $15 billion range expected, after the Federal Reserve trimmed interest rates on Tuesday.

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