Midday Commentary: High-grade bond spreads widen; financials trade better than issuance

By Cristal Cody

Tupelo, Miss., Jan. 29 - New financial paper traded better early Wednesday, though investment-grade bonds for the most part leaked wider at the start of the session, according to market sources.

"Financials in general seem to be a bit wider this A.M.," a trader said.

BB&T Corp.'s 2.25% notes due 2019 firmed 1 basis point on the offered side from where the notes traded late on Tuesday, according to a trader.

Goldman Sachs Group Inc.'s 2.625% notes due 2019 opened tighter than where the notes priced, a trader said.

The Markit CDX North American Investment Grade series 21 index ended Tuesday 3 bps tighter at a spread of 70 bps.

BB&T edges tighter

BB&T's 2.25% notes due 2019 (A2/A-/A+) firmed to 73 bps offered, a trader said on Wednesday.

The paper traded late Tuesday at 77 bps bid, 74 bps offered after BB&T sold $650 million of the notes at a spread of Treasuries plus 78 bps earlier in the day.

BB&T priced a total of $1.1 billion of notes, including a $450 million tranche of floaters, on Tuesday.

The financial services company is based in Winston-Salem, N.C.

Goldman firms

Goldman Sachs' 2.625% notes due 2019 traded early Wednesday at 107 bps offered, a trader said.

Goldman Sachs sold $2.5 billion of the five-year notes with a spread of 112.5 bps over Treasuries on Tuesday.

The issue priced as part of a $3.2 billion two-part offering of notes (Baa1/A-/A-) on Tuesday that included a $700 million add-on to the bank's existing floating-rate notes due Nov. 15, 2018.

The financial services company is based in New York City.

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