Morning Commentary: Fifth Third Bank notes tighten; credit spreads soften at open

By Cristal Cody

Eureka Springs, Ark., March 14 – High-grade bonds remained mostly tighter early Monday as market participants focused on three upcoming central bank meetings over the week.

Fifth Third Bank’s $1.5 billion two-part offering of notes that priced on Thursday remained tight in the secondary market as the session got underway on Monday.

The Markit CDX North American Investment Grade index opened on Monday 3 basis points softer at a spread of 86 bps.

The three-month Libor yield was stable at 63 bps early Monday.

Fifth Third firms

Fifth Third Bank’s 2.3% notes due 2019 traded tighter at 91 bps offered, a market source said on Monday.

The bank sold $750 million of the notes (A3/A-A) on Thursday at a spread of Treasuries plus 120 bps.

Fifth Third Bank’s tranche of 3.85% subordinated notes due 2026 (Baa1/BBB+/A-) tightened to 181 bps offered in secondary trading.

The notes priced in a $750 million tranche on Thursday at a spread of 193 bps over Treasuries.

Fifth Third is a Cincinnati-based financial services company.

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