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Morning Commentary: Citigroup, Wells Fargo notes tighten; trading volume light
By Cristal Cody
Eureka Springs, Ark., July 19 – New bank and financial paper that priced on Monday improved modestly in the secondary market on Tuesday as banks continue to report earnings.
Citigroup Inc.’s 4.125% subordinated notes due 2028 that priced on the heels of its second-quarter earnings report on Friday traded about 3 basis points tighter.
Wells Fargo & Co.’s 2.1% senior notes due 2021 sold following its second-quarter earnings results release on Friday firmed 2 bps in secondary trading.
Market sources expect more issuance as banks come out of earnings blackout.
Goldman Sachs Group, Inc. on Tuesday reported second-quarter earnings of $3.72 per share, compared with $1.98 in the same period a year ago. The earnings beat analyst expectations of $3.05 per share.
The Markit CDX North American Investment Grade index was unchanged to modestly softer at the start of the day at a spread of 72 bps.
Investment-grade trading volume on Monday totaled $7.12 billion, according to Trace.
Citigroup improves
Citigroup’s 4.125% subordinated notes due 2028 tightened to 255 bps offered in the secondary market, a source said.
Citigroup sold $1.5 billion of the notes (Baa3/BBB/A-) on Monday at a spread of 258 bps over Treasuries.
The financial services company is based in New York.
Wells Fargo firms
Wells Fargo’s 2.1% notes due 2021 traded 2 bps better at 98 bps offered, according to a market source.
The company priced $3 billion of the notes on Monday at a spread of 100 bps over Treasuries.
The retail, commercial and corporate banking services provider is based in San Francisco.
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