Morning Commentary: Royal Bank of Scotland, Newell Rubbermaid modestly better; credit spreads flat

By Cristal Cody

Eureka Springs, Ark., April 1 – Investment-grade bonds traded flat to modestly better in the secondary market early Friday as traders focused on the March U.S. jobs report.

Royal Bank of Scotland Group plc’s 4.8% senior notes due 2026 that were sold on Wednesday were mostly unchanged but about 4 basis points better than issuance.

Newell Rubbermaid Inc.’s 4.2% senior notes due 2026 (Baa3/BBB-/BBB-) traded about 1 bp tighter early Friday.

The Labor Department announced U.S. non-farm payrolls rose by 215,000 jobs in March, better than the 205,000 forecasted. The unemployment rate rose to 5% in March from 4.9% in February. Market analysts had expected the unemployment rate to be flat for the month.

The Markit CDX North American Investment Grade index opened the day unchanged at a spread of 79 bps.

Secondary investment-grade corporate bond trading volume climbed to $22.9 billion on Thursday, compared to $18.89 billion on Wednesday, $18.6 billion on Tuesday and $12.26 billion on Monday, according to Trace.

Royal Bank of Scotland steady

Royal Bank of Scotland Group’s 4.8% notes due 2026 traded mostly unchanged at 296 bps offered, a market source said.

Royal Bank of Scotland sold $1.5 billion of the notes (Ba1/BBB-/BBB+) on Wednesday at Treasuries plus 300 bps.

The financial services company is based in Edinburgh, Scotland.

Newell Rubbermaid firms

Newell Rubbermaid’s 4.2% notes due 2026 firmed about 1 bp to 184 bps offered, according to a market source.

The company sold $2 billion of the notes on March 18 at 235 bps over Treasuries.

Newell Rubbermaid is a consumer and commercial products maker based in Atlanta.

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