Morning Commentary: High-grade bonds mixed; Devon Energy eases; credit spreads open tighter

By Cristal Cody

Tupelo, Miss., Dec. 15 – High-grade bonds traded mostly flat to softer in early secondary trading, while credit spreads opened the session stronger on Tuesday ahead of the Federal Reserve’s policy rate decision on Wednesday.

Devon Energy Corp.’s 5.85% senior notes due 2025 eased 5 basis points.

Visa Inc.’s 3.15% senior notes due 2025 traded flat to 1 bp weaker.

Credit spreads continued to recover from Friday’s losses over the morning. The Markit CDX North American Investment Grade 25 index opened the day 2 bps tighter at a spread of 91 bps.

The index has ranged from a low spread of 60.7 bps to a high spread of 96.8 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

The three-month Libor was unchanged at 51 bps at the start of the day.

Devon Energy eases

Devon Energy’s 5.85% notes due 2025 traded 5 bps weaker at 385 bps offered in the secondary market, a source said.

The company sold $850 million of the notes (Baa1/BBB+/BBB+) on Thursday at Treasuries plus 362.5 bps.

The oil, natural gas and natural gas liquids company is based in Oklahoma City.

Visa mostly unchanged

Visa’s 3.15% notes due 2025 traded flat to 1 bp softer at 100 bps bid, according to a market source.

The company sold $4 billion of the notes (A1/A+) on Wednesday at a spread of Treasuries plus 97 bps.

The retail electronic payments network operator is based in San Francisco.

© 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.