Midday Commentary: Market sees 'first sign of weakness'; recent issues firm in trading

By Aleesia Forni

Columbus, Ohio, Sept. 10 - Monday's session in the investment-grade bond maket "opened up unchanged to slightly weaker," one trader said at midday.

"[Today was] the first sign of weakness I'd seen in the last three or four trading sessions," the source added. "Last week the market was very, very strong."

Last week's issues from AvalonBay Communities Inc., Air Products & Chemicals, Inc. and Flowserve Corp. were all tighter in Monday's trading.

However, the day had "been kind of quiet," the trader said. "[It's] got the feel of a summer Monday at the moment."

AvalonBay firms

Thursday's $450 million 2.95% 10-year issue of notes from AvalonBay was 3 basis points tighter on Monday.

The notes traded at 127 bps bid, 124 bps offered, the trader said.

The notes were sold at a spread of Treasuries plus 130 bps.

The manager and developer of apartment communities is based in Arlington, Va.

Air Products tightens

In other trading, Air Products & Chemicals' $400 million of 1.2% five-year senior notes traded at 53 bps bid, 48 bps offered at the day's midpoint.

The notes were priced at 55 bps over Treasuries on Thursday.

The industrial gas and chemical maker is based in Allentown, Pa.

Flowserve tighter

Meanwhile, Flowserve's $500 million of 3.5% 10-year senior notes were quoted 8.5 bps tighter than Thursday's issue price.

The notes were seen trading at 179 bps bid, 174 bps offered.

The notes were sold at a spread of 187.5 bps over Treasuries.

The flow control systems manufacturer is based in Irving, Texas.

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