Midday Commentary: Investment-grade bond spreads unchanged to tighter; Norfolk Southern flat

By Cristal Cody

Tupelo, Miss., Nov. 19 - Investment-grade credit spreads opened unchanged to slightly tighter on Tuesday as the market absorbed more than $6 billion of new supply on Monday with little impact on credit spreads, according to informed sources.

"Spreads in general [are] unchanged to a tad tighter," a trader said. "New issue market remains on fire" with everyone "trying to get in before Thanksgiving."

A heavy issuance calendar is expected over the rest of the week, according to market sources.

The Markit CDX North American Investment Grade series 21 index eased 1 basis point on Monday to a spread of 71 bps.

In early secondary trading on Tuesday, Norfolk Southern Corp.'s new 3.85% notes due 2024 traded flat.

ProAssurance Corp.'s 5.3% notes due 2023 that were sold on Monday were not seen in early trading on Tuesday.

Norfolk Southern flat

Norfolk Southern's 3.85% senior notes due 2024 traded early Tuesday at 117 bps offered, unchanged from Monday, a trader said.

The notes traded near the close on Monday at 119 bps bid, 117 bps offered after the issue priced earlier in the day.

Norfolk Southern (Baa1/BBB+/) sold $400 million of the notes on Monday with a spread of Treasuries plus 118 bps.

The railroad operator is based in Norfolk, Va.

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