Morning Commentary: Investment-grade spreads tight; Oracle, Goldman better in early trade

By Cristal Cody

Tupelo, Miss., July 7 – Investment-grade bond spreads remained narrow early Monday following a three-day holiday weekend and a strong June jobs report, market sources said.

The Markit CDX North American Investment Grade series 22 index firmed 2 basis points on Thursday to a spread of 55 bps.

The Labor Department reported on Thursday that total nonfarm payroll employment increased by 288,000 in June, while the unemployment rate dropped 0.2% to 6.1%, the lowest in more than five years.

In the secondary market, Oracle Corp.’s senior notes (A1/A+/A+) that were brought a week ago continue to trade tighter than issuance, according to a market source.

Goldman Sachs Group Inc.’s senior notes (Baa1/A-/A) also remain better than where the notes came in the previous week, a source said.

Oracle firms

Oracle’s 2.25% notes due 2019 traded better at 51 bps offered, a source said.

The notes edged up to 100.04 over the morning from where the paper last traded at par on Thursday, according to a market source.

Oracle sold $2 billion of the notes at Treasuries plus 65 bps, or 99.888 to yield 2.273%, as part of a $10 billion seven-part offering of bonds priced on June 30.

The computer software and technology company is based in Redwood City, Calif.

Goldman better

Goldman Sachs’ 3.85% notes due 2024 tightened to the 127 bps offered area, according to a market source.

Goldman sold $2.25 billion of the notes at Treasuries plus 135 bps in a $4 billion two-part offering of bonds on June 30.

The financial services company is based in New York City.

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