Morning Commentary: Southern Co. notes improve; Dell softens; credit spreads open tighter

By Cristal Cody

Eureka Springs, Ark., May 24 – Investment-grade bonds traded mixed in the secondary market on Tuesday morning.

Southern Co.’s 3.25% senior notes due 2026 improved about 4 basis points from Monday.

Dell, Inc.’s 6.02% senior secured notes due 2026 traded 2 bps weaker.

The Markit CDX North American Investment Grade index opened the session 2 bps tighter at a spread of 82 bps.

The three-month Libor yield was unchanged at 66 bps.

On Monday, $13.22 billion of investment-grade issues were traded, according to Trace data.

Southern Co. improves

Southern Co.’s 3.25% notes due 2026 were quoted at 140 bps offered on Tuesday morning, about 4 bps tighter from where the bonds traded on Monday, according to a market source.

Southern sold $1.75 billion of the notes (Baa2/BBB+/A-) on Thursday at 145 bps over Treasuries.

The electric utility company is based in Atlanta.

Dell softens

Dell’s 6.02% notes due 2026 eased 2 bps from Monday to 421 bps offered early Tuesday, a market source said.

The company sold $3.75 billion of the notes (Baa3/BBB-/BBB-) on May 17 at Treasuries plus 425 bps.

The technology and services company is based in Round Rock, Texas.

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