Morning Commentary: High-grade spreads steady ahead of Fed meeting; bank paper mostly flat

By Cristal Cody

Tupelo, Miss., Sept. 15 – Investment-grade bonds opened unchanged to slightly wider on Monday in front of the two-day Federal Reserve policy meeting that starts on Tuesday, according to market sources.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 60 bps on Friday.

In early secondary trading, bank and financial paper traded flat to 2 bps weaker, sources said.

Bank of America Corp.’s 4.2% notes due 2024 were mostly unchanged over the morning but have tightened 10 bps since the issue priced in August, a market source said.

Bank of America unchanged

Bank of America’s 4.2% notes due 2024 traded flat at 170 bps offered, a market source said on Monday.

The notes were quoted slightly higher over the morning at 99.26 to yield 4.291% from where the paper ended on Friday at 99.12 to yield 4.309%, according to a market source.

Bank of America sold $3 billion of the notes on Aug. 21 at a spread of 180 bps over Treasuries. The bonds priced at 99.927 to yield 4.209%.

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

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