Midday Commentary: Investment-grade bonds 'tad tighter' in early trade; busy primary ahead

By Cristal Cody

Tupelo, Miss., Nov. 6 - Investment-grade bond spreads opened a "tad tighter" in early secondary trading on Wednesday ahead of a busy new issue market, a trader said.

Bonds had traded weaker on Tuesday, and the Markit CDX North American Investment Grade series 21 index eased 1 basis point on the day to a spread of 74 bps.

Market sources expect the primary market to see another round of heavy issuance on Wednesday.

The new issue market is "on fire," one source said, adding "lots more today."

In the secondary market, long bonds from Noble Energy Inc. and Perrigo Co. Ltd. sold on Tuesday tightened moderately on the offered side.

Perrigo better

Perrigo's 5.3% senior notes due 2043 (Baa3/BBB/) traded better at 146 bps offered, a trader said.

The company sold $400 million of the bonds at a spread of 155 bps over Treasuries as part of a four-part offering.

The bonds traded toward the market close on Tuesday at 152 bps offered.

The Dublin, Ireland-based company is a subsidiary of Allegan, Mich.-based Perrigo Co., a maker of generic and over-the-counter pharmaceuticals.

Noble Energy

Noble Energy's 5.25% senior notes due 2043 (Baa2/BBB/) firmed to 148 bps offered on Wednesday in the secondary market, according to a trader.

The bonds traded at 152 bps bid, 149 bps offered going out in Tuesday's session.

Noble Energy sold $1 billion of the bonds at a spread of Treasuries plus 150 bps.

The crude oil and natural gas exploration and production company is based in Houston.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.