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Morning Commentary: Investment-grade credit spreads open weaker; bank, financial paper eases
By Cristal Cody
Tupelo, Miss., Dec. 16 – High-grade bonds and credit spreads continued to widen early Tuesday with bank and financial paper active but mostly softer, market sources said.
Wells Fargo & Co.’s 3.3% senior notes due 2024 eased 3 basis points in the secondary market and were quoted 20 bps wider than issuance.
Bank of America Corp.’s 2.6% senior notes due 2019 traded about 5 bps weaker, a source said.
Morgan Stanley & Co. Inc.’s 3.875% notes due 2024 widened 5 bps, according to a market source.
The Markit CDX North American Investment Grade series 23 index eased 2 bps to a spread of 74 bps on Monday and opened more than 1 bp wider on Tuesday, a source said.
Wells Fargo paper weak
Wells Fargo’s 3.3% notes due 2024 (A2/A+/AA-) eased 3 bps to 112 bps offered, according to a market source.
The issue priced in a $2.25 billion offering on Sept. 2 at a spread of Treasuries plus 92 bps.
The bank is based in San Francisco.
Bank of America eases
Bank of America’s 2.6% senior notes due 2019 traded about 5 bps weaker at 85 bps offered, according to a market source.
Bank of America (Baa2/A-/A) priced a $1.25 billion add-on to the notes on Jan. 15 at Treasuries plus 87 bps.
The issue originally priced on Oct. 17, 2013 in a $2.5 billion offering at Treasuries plus 128 bps.
The financial services company is based in Charlotte, N.C.
Morgan Stanley widens
Morgan Stanley’s 3.875% notes due 2024 (Baa2/A-/A-) widened 5 bps to 150 bps offered, a market source said.
Morgan Stanley sold $3 billion of the notes at a spread of Treasuries plus 130 bps on April 23, 2014.
The financial services company is based in New York City.
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