Morning Commentary: High-grade market action wanes; HSBC improves in early secondary trading

By Cristal Cody

Eureka Springs, Ark., Dec. 23 – Little action was seen early Friday in the investment-grade bond market with most desks thinly staffed with the bond markets set to close at 2 p.m. ET.

The bond markets will be closed on Monday for the Christmas Day holiday.

HSBC Holdings plc’s 4.375% subordinated notes due Nov. 23, 2026 were active and better in early secondary trading on Friday.

The three-month Libor yield was unchanged at 100 basis points over the morning, according to a market source.

Secondary market action started to slow on Thursday with $8.5 billion of high-grade issues traded, according to Trace.

Trading volume totaled $11.47 billion on Wednesday, $13.44 billion on Tuesday and $12.99 billion on Monday.

HSBC better

HSBC Holdings’ 4.375% subordinated notes due 2026 rose to 99.94 early Friday in the secondary market, compared to where the notes last traded on Thursday at 99.83, according to a market source.

The $1.5 billion offering of notes (A2/BBB+/A+) priced on Nov. 16 at 99.992 to yield 4.376%, or 215 bps over Treasuries.

The banking and financial services company is based in London.

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