Morning Commentary: Intel, CVS bonds soft in secondary; high-grade credit spreads flat

By Cristal Cody

Tupelo, Miss., July 28 – New long bonds brought earlier in July from Intel Corp. and CVS Health Corp. traded 1 basis point to 2 bps weaker in the investment-grade secondary market, while traders geared up for a busy primary session on Tuesday and the start of the Federal Reserve’s two-day policy meeting.

Intel’s 4.9% senior notes due 2045 eased 2 bps.

CVS Health’s 5.125% senior notes due 2045 traded about 1 bp wider.

The Markit CDX North American Investment Grade index was flat at a spread of 73 bps over the morning.

The CDX has ranged from a low of 60.4 bps to a high spread of 76.4 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

Intel eases

Intel’s 4.9% bonds due 2045 widened 2 bps to 182 bps offered, according to a market source.

The company priced a $2 billion tranche of the bonds (A1/A+/ A+) at Treasuries plus 185 bps on July 22 as part of a $7 billion deal.

Intel is a semiconductor chip maker based in Santa Clara, Calif.

CVS modestly softer

CVS Health’s 5.125% bonds due 2045 eased about 1 bp to 184 bps offered in secondary trading, a source said.

The company sold $3.5 billion of the bonds (Baa1/BBB+) on July 13 at a spread of Treasuries plus 190 bps as part of a $15 billion six-part offering of senior notes.

The pharmacy retailer is based in Scarsdale, N.Y.

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