Midday Commentary: Investment-grade bonds widen in early trade; Bank of America eases

By Cristal Cody

Tupelo, Miss., Jan. 30 - Investment-grade bonds continued to widen early Thursday after credit spreads moved out on Wednesday, according to market sources.

The Markit CDX North American Investment Grade series 21 index eased 3 basis points to a spread of 73 bps in the previous session.

Financial paper, which ticked wider on Wednesday, traded weaker in the secondary market Thursday morning, market sources said.

Bank of America Corp.'s 5% senior notes due 2044 have widened more than 10 bps since the issue priced earlier in the month, according to a source.

"It's been a volatile 36 hours for credit spreads," RBC Capital Markets, LLC analysts said in a note on Thursday. "Many of this month's financial issues are trading wider than the new issue spreads and this could pressure new issue concessions wider on subsequent deals."

Bank of America widens

Bank of America 5% notes due 2044 (Baa2/A-/A) were quoted early Thursday at 132 bps offered, 12 bps wider than where the issue priced on Jan. 15, a source said.

Bank of America sold $2 billion of the 30-year notes at a spread of 120 bps over Treasuries.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.