Morning Commentary: High-grade primary market quiet; Libor yield ticks up; Wells Fargo better

By Cristal Cody

Tupelo, Miss., June 15 – Investment-grade pricing action looks set for a second quiet session on Thursday with no reported issuers planning to tap the primary market.

Issuers stayed out of the market on Wednesday with the Federal Reserve set to release its newest monetary policy. The Fed later raised rates by 25 basis points.

The three-month Libor yield rose 1 bp to 1.25% on Thursday, according to a market source.

Wells Fargo & Co.’s notes have been active in the secondary market over the last few sessions. Wells Fargo’s 4.75% notes due Dec. 7, 2046 (A3) are trading nearly 2 points higher since Monday. The notes traded at 107.32 early Thursday, a source said. The bonds went out on Wednesday at 106.96 and last traded on Monday at 105.39.

The San Francisco-based financial services company sold $2 billion of the notes on Dec. 1, 2016 at 99.81 to yield 4.76% and a spread of Treasuries plus 165 bps.

In the broader secondary market, trading volume totaled $16.62 billion on Wednesday, compared to $18.02 billion on Tuesday and $13.21 billion on Monday, according to Trace.

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