Morning Commentary: Primary action expected over session; Goldman, Morgan Stanley paper firms

By Cristal Cody

Tupelo, Miss., Oct. 23 – Although primary action was expected to stay light on Friday, several high-grade bond issuers, including First Horizon National Corp. and ACE INA Holdings Inc., plan to tap the market.

Investment-grade bank and financial paper was mostly better in early secondary trading.

Goldman Sachs Group Inc.’s new paper traded 4 basis points to 5 bps tighter.

Morgan Stanley’s 4% senior notes due 2025 firmed 2 bps.

Investment-grade secondary trading volume dipped slightly on Thursday to $16.8 billion from the $17.3 billion of issues traded on Wednesday, according to Trace.

The Markit CDX North American Investment Grade 25 index was last seen 2 bps tighter at a spread of 80 bps.

Goldman Sachs improves

Goldman’s 4.25% subordinated notes due 2025 firmed 4 bps to 211 bps offered, according to a market source early Friday.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The company’s 4.75% bonds due 2045 were quoted 5 bps tighter in secondary trading at 176 bps offered.

The bonds (A3/A-/A) priced in a $1.75 billion tranche in the Oct. 16 sale at Treasuries plus 192 bps.

The financial services company is based in New York City.

Morgan Stanley better

Morgan Stanley’s 4% notes due 2025 traded 2 bps tighter over the morning at 150 bps offered, a market source.

The notes were unchanged on Thursday at 159 bps bid.

Morgan Stanley sold $3 billion of the notes (A3/A-/A) on July 20 at Treasuries plus 165 bps.

The financial services company is based in New York City.

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