Morning Commentary: Barclays widens; Wells Fargo eases; credit spreads open wider

By Cristal Cody

Eureka Springs, Ark., June 27 – Investment-grade bonds remained weak early Monday in secondary trading as the markets continue to absorb Britain’s vote to leave the European Union.

Barclays plc’s 4.375% senior notes due 2026 were quoted 32 basis points wider on Monday.

Wells Fargo & Co.’s 4.4% subordinated notes due 2046 traded 14 bps weaker.

The financial markets are expected to remain volatile in the near term over Brexit concerns.

Credit spreads opened softer after widening 10 bps on Friday. The Markit CDX North American Investment Grade index was 2 bps weaker at a spread of 89 bps over the morning.

The three-month Libor yield was down 2 bps to 62 bps early Monday.

On Friday, $8.86 billion of investment-grade issues were traded, according to Trace.

Barclays widens

Barclays’ 4.375% notes due 2026 were quoted 32 bps wider at 258 bps offered on Monday, a source said.

Barclays sold $2.5 billion of the notes (Baa3/BBB/A) on Jan. 5 at a spread of Treasuries plus 220 bps.

The financial services company is based in London.

Wells Fargo softens

Wells Fargo’s 4.4% notes due 2046 traded 14 bps weaker at 203 bps offered, according to a market source.

Wells Fargo sold $2 billion of the notes on June 7 at 188 bps over Treasuries.

The financial services company is based in San Francisco.

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