Morning Commentary: High-grade credit spreads firm; Morgan Stanley, Wells Fargo mostly flat

By Cristal Cody

Tupelo, Miss., Oct. 31 – High-grade credit spreads tightened more than 1 basis point early Friday following the Bank of Japan’s surprise announcement that it will expand its annual asset purchase program, according to market sources.

The Markit CDX North American Investment Grade series 23 index closed on Thursday flat at a spread of 66 bps.

Bank and financial paper traded mostly flat to 1 bp tighter in the secondary market, a source said.

Morgan Stanley’s 3.7% senior notes due 2024 priced in the previous week were unchanged in early trading, according to a market source.

Wells Fargo & Co.’s 4.65% subordinated bonds due 2044 traded flat to 1 bp tighter, a source said.

Morgan Stanley steady

Morgan Stanley’s 3.7% notes due 2024 were quoted early Friday unchanged at 141 bps offered, a source said.

Morgan Stanley sold $3 billion of the notes (Baa2/A-/A) on Oct. 20 at a spread of Treasuries plus 155 bps.

The financial services company is based in New York City.

Wells Fargo stable

Wells Fargo’s 4.65% subordinated bonds due 2044 traded flat to 1 bp tighter at 161 bps offered, a source said.

Wells Fargo sold $2 billion of the bonds (A3/A/A+) with a spread of Treasuries plus 165 bps on Tuesday.

The bank is based in San Francisco.

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