Midday Commentary: Spreads softer; financials mixed; Morgan Stanley eases; Pfizer firms

By Cristal Cody

Tupelo, Miss., May 9 - The session opened on Friday with investment-grade bond spreads slightly wider after tightening the previous day, according to market sources.

"The combination of narrowing spreads and low government bond yields has sucked a lot of the value out of the investment grade bond market recently," RBC Capital Markets, LLC analysts said in a note on Friday.

The Markit CDX North American Investment Grade series 22 index ended Thursday 1 basis point tighter at a spread of 64 bps.

In early trading on Friday, financial paper was mixed, market sources said.

Morgan Stanley's 3.875% notes due 2024 have widened about 5 bps since Monday, according to a market source.

Pfizer Inc.'s bonds brought a year ago traded slightly better midday, a source said.

Morgan Stanley eases

Morgan Stanley's 3.875% notes due 2024 eased 1 bp in early trading to 128 bps offered on Friday, according to a market source.

The notes have widened from where the paper traded on Monday at 123 bps offered.

Morgan Stanley sold $3 billion of the notes (Baa2/A-/A-) on April 23 at Treasuries plus 130 bps.

The financial services company is based in New York City.

Pfizer firms

Pfizer's 4.3% notes due 2043 firmed 2 bps to 93 bps offered, a market source said early Friday.

The company sold $750 million of the bonds on May 28, 2013 at Treasuries plus 100 bps.

Pfizer is a New York City-based biopharmaceutical company.

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