Morning Commentary: Credit spreads firm; Celgene wrapped around issuance; Morgan Stanley soft

By Cristal Cody

Tupelo, Miss., Aug. 10 – High-grade bonds were mixed in secondary trading early Monday while the market prepared for a strong round of new deal volume later in the session.

Credit spreads opened 1 basis point tighter at a spread of 74 bps. The Markit CDX North American Investment Grade index closed on Friday 1 bp weaker at a spread of 75 bps.

The three-month Libor yield was unchanged at 31 bps on Monday.

In the secondary market, Celgene Corp.’s 5% senior notes due 2045 traded 3 bps wider.

Morgan Stanley’s 2.8% senior notes due 2020 eased about 1 bp.

Celgene eases

Celgene’s 5% bonds due 2045 eased 3 bps to 215 bps offered, according to a market source.

Celgene sold $2 billion of the bonds (Baa2/BBB+) on Aug. 3 at Treasuries plus 215 bps in an $8 billion five-part deal.

The global biopharmaceutical company is based in Summit, N.J.

Morgan Stanley soft

Morgan Stanley’s 2.8% senior notes due 2020 traded about 1 bp wider at 112 bps offered, a market source said.

Morgan Stanley sold $2.5 billion of the notes (A3/A-/A) on June 11 at a spread of Treasuries plus 110 bps as part of a $2.9 billion two-part offering of five-year fixed- and floating-rate notes.

The financial services company is based in New York City.

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