Morning Commentary: High-grade credit spreads steady; Bank of America, Morgan Stanley firm

By Cristal Cody

Tupelo, Miss., Dec. 19 – High-grade corporate bonds and credit spreads were mostly unchanged early Friday after tightening in the previous two sessions, according to market sources.

The Markit CDX North American Investment Grade series 23 index ended 5 basis points tighter at a spread of 65 bps on Thursday.

Financial subordinated debt was mostly stronger in secondary trading, a market source said.

Bank of America Corp.’s 4.25% subordinated notes due 2026 were quoted 4 bps tighter.

Morgan Stanley & Co. Inc.’s 4.35% subordinated notes due 2026 firmed 3 bps in the secondary market.

Bank of America better

Bank of America’s 4.25% notes due 2026 (Baa3/BBB+/BBB+) firmed 4 bps to 214 bps offered, according to a market source.

Bank of America sold $2 billion of the notes on Oct. 17 at a spread of Treasuries plus 210 bps.

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

Morgan Stanley firms

Morgan Stanley’s 4.35% subordinated notes due 2026 (Baa3/BBB+/BBB+) traded 3 bps tighter at 214 bps offered, a market source said.

The issue ended the previous week in the 218 bps bid, 213 bps offered area.

Morgan Stanley sold $2.25 billion of the notes on Sept. 3 at Treasuries plus 195 bps.

The financial services company is based in New York City.

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