Midday Commentary: High-grade bond spreads open tighter; Bank of America, Wells Fargo better

By Cristal Cody

Tupelo, Miss., Jan. 21 - Investment-grade bonds opened generally "tighter this morning" ahead of an expected busy primary session following Monday's market holiday, a source said early Tuesday.

The bond markets were closed on Monday for observance of the Martin Luther King Jr. holiday.

The Markit CDX North American Investment Grade series 21 index ended Friday unchanged at a spread of 65 basis points.

Bank of America Corp.'s existing 2.6% senior notes due 2019 that were tapped in the previous week tightened in the secondary market, according to a market source.

Wells Fargo & Co.'s 3% senior notes due 2021, which priced on Thursday, traded about 2 bps better, a market source said.

Bank of America better

Bank of America's 2.6% senior notes due 2019 firmed to 81 bps offered on Tuesday from 83 bps offered on Friday, a source said.

Bank of America (Baa2/A-/A) sold $1.25 billion in a reopening of the notes on Jan. 15 with a spread of Treasuries plus 87 bps.

The issue originally priced on Oct. 17 in a $2.5 billion offering at Treasuries plus 128 bps.

The financial services company is based in Charlotte, N.C.

Wells Fargo firms

Wells Fargo's 3% notes due 2021 brought on Thursday traded early Tuesday about 2 bps tighter at 73 bps offered, a market source said.

Wells Fargo sold $1.5 billion of the notes (A2/A+/) at a spread of Treasuries plus 75 bps.

The banking services company is based in San Francisco.

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