Morning Commentary: Citigroup paper tightens; Goldman Sachs notes trade better than issuance

By Cristal Cody

Tupelo, Miss., Oct. 20 – New investment-grade financial paper traded mostly tighter early Tuesday, while the market overall was opening mixed, sources said.

Citigroup Inc.’s new 2.65% fixed-rate notes due 2020 that priced on Monday traded 3 basis points tighter early Tuesday.

Goldman Sachs Group Inc.’s $5 billion four-part offering of notes that priced on Friday continued to trade tighter in the secondary market early Tuesday.

About $14.5 billion of investment-grade bonds traded on Monday, according to Trace. Of the total 4,808 issues traded, 2,303 bonds advanced and 2,400 declined.

The Markit CDX North American Investment Grade 25 index ended 1 bp tighter on Monday at a spread of 80 bps.

The high-grade index has ranged from a low spread of 60.7 bps to a high spread of 94.8 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

Citi paper firms

Citigroup’s 2.65% notes due 2020 firmed to 130 bps offered in the secondary market, a source said.

Citigroup sold $2.7 billion of the notes (Baa1/A-/A) on Monday as part of a $3 billion two-part offering at a spread of Treasuries plus 133 bps.

The financial services company is based in New York.

Goldman strong

Goldman’s 2.75% senior notes due 2020 remain better than issuance but softened 2 bps to 128 bps offered in early trading, a market source said.

Goldman priced a $750 million tap of the existing notes (A3/A-/A) on Friday at Treasuries plus 132 bps. The original $1.25 billion issue priced on Sept. 8 at a spread of Treasuries plus 127 bps.

Goldman’s new 4.25% subordinated notes due 2025 firmed to 221 bps offered in secondary trading, the source said. Goldman priced $2 billion of the notes (Baa2/BBB+/A-) in Friday’s sale at Treasuries plus 230 bps.

Goldman’s tranche of 4.75% bonds due 2045 tightened to 184 bps offered. The bonds (A3/A-/A) were sold in a $1.75 billion slice on Friday at Treasuries plus 192 bps.

The financial services company is based in New York City.

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