Morning Commentary: Morgan Stanley tightens; Bank of America stronger; credit spreads steady

By Cristal Cody

Eureka Springs, Ark., April 20 – Morgan Stanley & Co. Inc.’s paper has tightened about 10 basis points to 15 bps in the past week and continued to improve in the secondary market early Wednesday.

The company’s five-year notes that priced on Monday traded 10 bps tighter than issuance at the start of the day.

Bank of America Corp.’s 3.5% senior notes due 2026 traded 5 bps better than where the issue was seen on Tuesday in the secondary market.

High-grade credit spreads were steady as the session got underway. The Markit CDX North American Investment Grade index was mostly unchanged at a spread of 76 bps.

Investment-grade secondary trading volume jumped to $19.72 billion on Tuesday from $14.75 billion on Monday, according to Trace.

Morgan Stanley better

Morgan Stanley’s 2.5% notes due 2021 traded 10 bps tighter than issuance at 125 bps offered in the secondary market early Wednesday, a source said.

Morgan Stanley sold $2.5 billion of the notes at a spread of 135 bps over Treasuries on Monday.

The company’s 3.875% notes due 2026 firmed 2 bps from where the paper headed out on Tuesday to 154 bps offered early Wednesday, according to a market source.

The notes were quoted on April 13 trading at 170 bps bid.

Morgan Stanley sold $3 billion of the notes (A3/BBB+/A) on Jan. 22 at a spread of 185 bps over Treasuries.

The financial services company is based in New York City.

Bank of America improves

Bank of America’s 3.5% notes due 2026 tightened 5 bps to 158 bps offered, a market source said.

The paper was quoted trading on Tuesday at 163 bps offered.

Bank of America sold $2.5 billion of the notes (Baa1/BBB+/A) on Thursday at a spread of Treasuries plus 173 bps.

The bank is based in Charlotte, N.C.

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