Morning Commentary: High-grade market quiet; CSX, Deutsche unchanged; credit spreads improve

By Cristal Cody

Eureka Springs, Ark., Oct. 17 – Investment-grade market action opened fairly quietly early Monday with no reported issues in the deal pipeline and bonds mostly unchanged in the secondary market.

About $25 billion of high-grade supply is expected for the week, according to market sources.

CSX Corp.’s notes (Baa1/BBB+) that priced on Thursday were flat in secondary trading.

Deutsche Bank AG’s 4.25% notes due 2021 were unchanged from Friday.

The Markit CDX North American Investment Grade index opened about 1 basis point tighter at a spread of 75 bps.

The three-month Libor yield was steady at the start of the day at 88 bps.

On Friday, $11.7 billion of investment-grade issues were traded, according to Trace.

CSX steady

CSX’s 2.6% notes due 2026 that priced on Thursday were unchanged early Monday at 88 bps offered, a market source said.

The company sold $700 million of the notes at a spread of Treasuries plus 90 bps.

The transportation company is based in Jacksonville, Fla.

Deutsche stable

Deutsche Bank’s 4.25% notes due 2021 traded unchanged from Friday at 272 bps offered, a market source said.

The bank priced a $1.5 billion add-on to the notes on Tuesday at a spread of Treasuries plus 290 bps. The notes were originally sold in a $3 billion tranche on Oct. 7 at a spread of Treasuries plus 300 bps.

Deutsche Bank is a banking and financial services company based in Frankfurt.

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