Morning Commentary: Investment-grade bond spreads firm; Citi softer in early trade

By Cristal Cody

Tupelo, Miss., Aug. 4 – Investment-grade bonds opened 1 basis point to 2 bps tighter on Monday after widening in the previous two market sessions, an informed source said.

The Markit CDX North American Investment Grade series 22 index eased 3 bps to a spread of 67 bps on Friday. The index widened 4 bps in Thursday’s session.

Market activity remained quiet over the morning, sources said.

The Canadian bond markets are closed for the day for a civic holiday.

In the secondary market, Citigroup Inc.’s 3.75% notes due 2024 that priced in June remain wider than issuance, a source said.

Citi trades

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) traded wider at 125 bps offered, according to a market source.

The notes rose to 100.51 to yield 3.688% in early trading from where the paper last traded at 100.04 to yield 3.745% on Friday, a source said.

Citigroup sold $1.25 billion of the 10-year notes on June 9 at a spread of Treasuries plus 115 bps, or 99.876 to yield 3.765%.

The bank is based in New York City.

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