Morning Commentary: Wells Fargo paper softens; Credit Suisse eases; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., April 26 – Investment-grade bank and financial paper traded modestly softer early Tuesday ahead of the start of the Federal Reserve’s two-day policy meeting.

Wells Fargo & Co.’s 3% senior notes due 2026 eased 2 basis points.

Credit Suisse Group Funding (Guernsey) Ltd.’s senior notes due 2026 traded 2 bps weaker.

The Markit CDX North American Investment Grade series 23 index opened about 1 bp tighter at a spread of 74 bps.

The three-month Libor yield was unchanged at 64 bps over the morning.

On Monday, $15.2 billion of investment-grade issues were traded, according to Trace.

Wells Fargo eases

Wells Fargo’s 3% notes due 2026 widened 2 bps to 121 bps offered in secondary trading, a market source said.

The company sold a $500 million reopening of the notes (A2/A/AA-) on Wednesday at a spread of 125 bps over Treasuries.

Wells Fargo originally sold $3 billion of the notes on April 15 at Treasuries plus 130 bps.

The San Francisco-based company provides retail, commercial and corporate banking services.

Credit Suisse softens

Credit Suisse Group’s 4.55% notes due 2026 eased 2 bps to 247 bps offered, according to a market source.

Credit Suisse Group Funding sold $2 billion of the notes (Baa3/BBB+/A) on April 13 at a spread of 280 bps over Treasuries.

The financial services company is based in Zurich.

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