Morning Commentary: UBS paper tightens; Wells Fargo unchanged; CDX at widest range of year

By Cristal Cody

Tupelo, Miss., Sept. 30 – Bank and financial paper traded mostly unchanged to tighter in the secondary market early Wednesday as traders focused on economic data.

UBS Group Funding (Jersey) Ltd.’s 4.125% senior notes due 2025 firmed 3 basis points but remain weaker than where the paper priced earlier in the month.

Wells Fargo & Co.’s 3.55% senior holding company notes due 2025 were unchanged in the secondary market.

The three-month Libor yield was stable at 33 bps.

The Markit CDX North American Investment Grade 25 index closed on Tuesday 1 bp weaker at a spread of 93.3 bps, the widest of the year. The index has ranged from a low spread of 60.7 bps to a high of 93.3 bps over the past 12 months, according to a Barclays Bank plc report on Wednesday.

UBS improves

UBS Group Funding’s 4.125% notes due 2025 traded 3 bps better at 212 bps offered, a market source said.

UBS Group Funding sold $2.5 billion of the notes (BBB+/A) on Sept. 21 at a spread of Treasuries plus 195 bps.

The company is a subsidiary of Zurich-based financial services company UBS Group AG.

Wells Fargo unchanged

Wells Fargo’s 3.55% notes due 2025 that priced on Sept. 21 traded flat at 146 bps offered, according to a market source.

Wells Fargo sold $2.55 billion of the notes (A2/A+/AA-) at 137.5 bps over Treasuries.

The bank is based in San Francisco.

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