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Morning Commentary: Primary market quiet; Bank of Montreal firms; Societe Generale holds tight
By Cristal Cody
Eureka Springs, Ark., Aug. 26 – High-grade primary action is expected to stay quiet over Friday’s session following about $5.4 billion of corporate bond issuance over the week.
Trading action was light over the morning with attention focused on Federal Reserve chairman Janet Yellen’s Jackson Hole, Wyo., speech.
Bank of Montreal’s 1.9% senior medium-term notes due 2021 that priced on Wednesday were quoted about 3 basis points tighter than issuance early Friday.
Societe Generale SA’s 4.25% notes due 2026 sold the previous week remain strong in the secondary market, trading more than 20 bps better than pricing.
The Markit CDX North American Investment Grade index opened mostly unchanged at a spread of 72 bps.
The three-month Libor yield was stable at 83 bps.
On Thursday, $14.6 billion of investment-grade issues were traded, compared to $16.06 billion on Wednesday, $14.6 billion on Tuesday and $10.32 billion on Monday, according to Trace.
Bank of Montreal improves
Bank of Montreal’s 1.9% notes due 2021 traded about 3 bps tighter than issuance at 77 bps offered, according to a market source.
Bank of Montreal sold $2 billion of the five-year notes (Aa3/A+/AA-) on Wednesday at a spread of Treasuries plus 80 bps.
The financial services company is based in Toronto.
Societe Generale strong
Societe Generale’s 4.25% notes due 2026 were seen in the secondary market early Friday at 253 bps offered, according to a market source.
The company sold $1 billion of the notes (Baa3/BBB/A) on Aug. 16 at a spread of 275 bps over Treasuries.
Societe Generale is a Paris-based banking and financial services company.
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