Morning Commentary: Xerox firms; Plains Pipeline, Deutsche notes improve; credit spreads flat

By Cristal Cody

Tupelo, Miss., Aug. 19 – New investment-grade corporate bonds priced at the start of the week remain stronger in secondary trading, while credit spreads opened unchanged, according to market sources early Wednesday.

Xerox Corp.’s 3.5% senior notes due 2020 that priced on Monday tightened more than 12 basis points in the secondary market.

The new 4.65% senior notes due 2025 that Plains All American Pipeline, LP and PAA Finance Corp. priced on Monday traded 4 bps better than issuance.

Deutsche Bank AG’s new 2.95% notes due 2020 were seen 3 bps tighter.

The three-month Libor yield rose 1 bp to 33 bps on Wednesday.

The Markit CDX North American Investment Grade index was unchanged at the start of the session at a spread of 78 bps.

Xerox tightens

The 3.5% senior notes due 2020 that Xerox priced in a $400 million offering on Monday traded early Wednesday at 199 bps offered, a market source said.

The company sold the notes (Baa2/BBB/BBB) at a spread of Treasuries plus 212.5 bps.

The maker of office machines is based in Norwalk, Conn.

Plains Pipeline firms

The 4.65% senior notes due 2025 brought to market on Monday by Plains All American Pipeline and PAA Finance traded better at 246 bps offered, a source said.

The companies sold $1 billion of the notes (Baa2/BBB+) at Treasuries plus 250 bps.

Plains All American Pipeline is an oil and natural gas transportation, production and storage company based in Houston.

Deutsche Bank improves

Deutsche Bank’s 2.95% notes due 2020 tightened to 140 bps offered in the secondary market, a source said.

The notes (A3/BBB+/A) priced in a $1 billion tranche on Monday at Treasuries plus 143 bps.

The bank is based in Frankfurt.

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