Morning Commentary: First Midwest Bancorp preps issue; credit spreads firm; Shire mostly flat

By Cristal Cody

Eureka Springs, Ark., Sept. 22 – New investment-grade bond issuers in the deal pipeline include First Midwest Bancorp, Inc., which plans to bring a subordinated notes offering.

Meanwhile, high-grade credit spreads opened stronger on Thursday. The Markit CDX North American Investment Grade index opened the session about 2 basis points tighter at a spread of 77 bps.

In the secondary market, Shire Acquisitions Investments Ireland DAC’s senior notes (Baa3/BBB-) that priced on Monday traded mostly flat to modestly better than issuance.

The three-month Libor yield rose 1 bp to 87 bps on Thursday.

Investment-grade secondary bond volume totaled $16.3 billion on Wednesday, compared to $19 billion on Tuesday and $14.5 billion on Monday, according to Trace.

Shire unchanged

Shire’s 2.4% notes due 2021 traded flat at 118 bps bid in the secondary market, a source said.

The five-year notes priced in a $3.3 billion tranche on Monday at Treasuries plus 120 bps.

Shire’s 3.2% notes due 2026 traded wrapped around issuance.

The company sold $3 billion of the 10-year notes in Monday’s offering at 150 bps over Treasuries.

The notes are fully and unconditionally guaranteed by parent company Shire plc.

Shire is a global biotechnology company based in Dublin.

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