Morning Commentary: Spreads mostly flat with payrolls in focus; Bayer bonds trade tighter

By Aleesia Forni

Virginia Beach, Oct. 3 – Spreads in the high-grade secondary market were mostly flat to tighter at mid-morning, with the market’s focus firmly set on the release of September’s payrolls data.

The Markit CDX North American Investment Grade series 22 index was 1 basis point tighter at a spread of 62 bps.

The Labor Department reported that the U.S. economy added 248,000 jobs during September, compared to expectations of 215,000.

The unemployment rate fell to 5.9%.

Meanwhile, tranches of Bayer US Finance LLC’s new $7 billion six-part offering of senior notes continued to trade better, a market source said.

The company’s recently priced $2 billion of 2.375% five-year notes traded 4 bps tighter on the day at 70 bps bid, 66 bps offered.

The notes sold with a spread of Treasuries plus 80 bps on Wednesday.

Bayer’s $1.5 billion of 3% notes due 2021, which priced at Treasuries plus 90 bps, traded at 82 bps bid, 78 bps offered.

The company’s $1.75 billion of 3.375% 10-year notes traded around 3 bps better at 99 bps bid, 96 bps offered following Wednesday’s pricing at Treasuries plus 110 bps.

The German chemical and pharmaceutical company is based in Leverkusen.

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