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Morning Commentary: High-grade spreads improve; Goldman, Bank of America ease; PepsiCo firms
By Cristal Cody
Tupelo, Miss., Oct. 21 – High-grade credit spreads remained firm early Tuesday after improving in Monday’s session, market sources said.
The Markit CDX North American Investment Grade series 23 index ended 1 basis point tighter at a spread of 69 bps on Monday.
Bank and financial paper was mixed in early trading, a source said.
Goldman Sachs Group Inc.’s 3.85% notes due 2024 lost gains made early Monday and traded about 6 bps wider, according to a market source.
Bank of America Corp.’s 4.25% subordinated notes due 2026 that priced on Friday eased 2 bps, a source said.
In other secondary action, PepsiCo Inc.’s 4.25% senior notes due 2044 traded nearly 10 bps tighter than where the notes came on Friday, according to a market source.
Goldman widens
Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) eased about 6 bps to 147 bps offered, according to a market source.
The notes were quoted early Monday at 141 bps offered.
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 eases
Bank of America’s 4.25% notes due 2026 (Baa3/BBB+/BBB+) that priced on Friday eased 2 bps to 207 bps offered, a market source said.
Bank of America sold $2 billion of the notes on Friday at Treasuries plus 210 bps.
The financial services company is based in Charlotte, N.C.
PepsiCo tightens
PepsiCo’s 4.25% notes due 2044 (A1/A-/) were quoted 2 bps tighter at 121 bps offered in early trading, a source said.
The company sold $500 million of the 30-year notes on Friday at Treasuries plus 130 bps.
The global food and beverage company is based in Purchase, N.Y.
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