Morning Commentary: Investment-grade credit spreads improve at open; Charter Communications widens

By Cristal Cody

Tupelo, Miss., Aug. 25 – High-grade credit spreads narrowed at the opening of the trading session on Tuesday.

The Markit CDX North American Investment Grade index widened 5 basis points on Monday to a spread of 88 bps, the widest range of the year, but was seen over the morning on Tuesday 4 bps tighter at a spread of 84 bps.

“CDS implied credit spreads are sharply narrower this morning following China’s announcement that it will cut both its benchmark interest rates and reserve requirement ratio in an effort to stem the precipitous decline in the Shanghai Composite,” RBC Capital Markets LLC analysts said in a note on Tuesday.

In the secondary market, Charter Communications Inc.’s senior secured notes (Ba1/BBB-) that priced in July are trading as much as 32 bps wider than issuance.

Charter bonds weak

Charter Communications’ 4.908% notes due 2025 widened to 292 bps offered in secondary trading, a market source said.

The company sold $4.5 billion of the notes on July 9 at a spread of Treasuries plus 260 bps.

Charter Communications’ 6.484% notes due 2045 were quoted weaker at 355 bps offered.

The bonds priced in a $3.5 billion tranche in the July 9 sale at Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

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