Morning Commentary: High-grade primary active; CVS Health notes improve; credit spreads steady

By Cristal Cody

Eureka Springs, Ark., May 18 – Investment-grade bonds traded modestly better while credit spreads were mostly flat ahead of new supply expected later on Wednesday from companies including Whirlpool Corp. and Priceline Group Inc.

CVS Health Corp.’s $3.5 billion of senior notes (Baa1/BBB+) that priced on Monday traded 2 basis points to 3 bps tighter in the secondary market.

The Markit CDX North American Investment Grade index opened mostly unchanged at a spread of 83 bps.

Secondary trading volume rose to $15.03 billion on Tuesday from $11.67 billion of investment-grade issues traded on Monday, according to Trace.

CVS Health firms

CVS Health’s 2.125% notes due 2021 traded 3 bps better early Wednesday at 89 bps offered, according to a market source.

The company sold $1.75 billion of the five-year notes on Monday at a spread of Treasuries plus 92 bps.

CVS Health’s 2.875% notes due 2026 firmed 2 bps to 120 bps offered in the secondary market.

The 10-year notes were sold on Monday in a $1.75 billion tranche at a spread of 122 bps over Treasuries.

The pharmacy retailer is based in Scarsdale, N.Y.

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