Morning Commentary: Investment-grade credit spreads open softer; Goldman, Bank of America tighten

By Cristal Cody

Tupelo, Miss., Oct. 20 – High-grade credit spreads opened about 1 basis point weaker on Monday ahead of planned bank issuance, according to market sources.

The Markit CDX North American Investment Grade series 23 index ended 4 bps tighter at a spread of 70 bps on Friday.

Issuers including Goldman Sachs Group Inc., Morgan Stanley & Co. Inc. and Bank of America Corp. plan to tap the high-grade bond market during the session.

Goldman Sachs’ 3.85% notes due 2024 tightened 5 bps in secondary trading from Friday’s market, a source said.

Bank of America’s 4% notes due 2024 traded 4 bps better in the secondary market, a source said.

Goldman paper tightens

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) firmed 5 bps to 141 bps offered, according to a market source.

The notes traded late Friday at 146 bps offered, a source said.

Goldman Sachs sold $2.25 billion of the notes on June 30 at a spread of Treasuries plus 135 bps.

The financial services company is based in New York City.

Bank of America firms

Bank of America’s 4% notes due 2024 (Baa2/A-/A) traded early Monday at 135 bps offered, 4 bps tighter than where the paper headed out on Friday, a source said.

Bank of America sold $2.75 billion of the notes on March 27, 2014 at Treasuries plus 137 bps.

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

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