Morning Commentary: High-grade bond spreads steady ahead of supply; bank paper flat to softer

By Cristal Cody

Tupelo, Miss., Aug. 7 – The investment-grade bond market is set for additional primary supply over Thursday’s session, with the week already racking up more than double the issuance brought in the previous week, sources said.

Issuers including Citigroup Inc., Pacific Gas and Electric Co., Berkshire Hathaway Inc., CVS Caremark Corp., HCP, Inc. and WellPoint, Inc. plan to price bonds.

High-grade credit spreads were stable over the morning, a source said.

The Markit CDX North American Investment Grade series 22 index ended unchanged on Wednesday at a spread of 66 basis points.

Bank and financial paper traded flat to modestly softer, according to a market source.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 that priced in June softened about 2 bps in secondary trading, a source said.

JPMorgan Chase & Co.’s 3.625% senior notes due 2024 were unchanged, according to the market source.

Goldman eases

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) eased 2 bps to 136 bps offered, according to a market source early Thursday.

Goldman sold $2.25 billion of the notes at Treasuries plus 135 bps on June 30.

The financial services company is based in New York City.

JPMorgan unchanged

JPMorgan’s 3.625% senior notes due 2024 (A3/A/A+) traded flat at 108 bps offered, a market source said.

JPMorgan sold $2 billion of the notes on May 6 at a spread of Treasuries plus 110 bps.

The financial services company is based in New York City.

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