Morning Commentary: Norfolk Southern firms; Walgreens flat; credit spreads leak wider

By Cristal Cody

Eureka Springs, Ark., June 1 – Investment-grade bonds were mixed in the secondary market early Wednesday.

Norfolk Southern Corp.’s 2.9% senior notes due 2026 that priced on Tuesday improved about 2 basis points.

Walgreens Boots Alliance Inc.’s 3.45% notes due 2026 were unchanged over the morning.

The Markit CDX North American Investment Grade index leaked 1 bp wider at the start of Wednesday’s session to a spread of 78 bps.

The three-month Libor yield was stable at 67 bps.

On Tuesday, about $16.8 billion of investment-grade issues were traded, according to Trace.

Norfolk Southern firms

Norfolk Southern’s 2.9% notes due 2026 traded at 108 bps offered in the secondary market, a source said.

Norfolk Southern sold $600 million of the 10-year notes (Baa1/BBB+) on Tuesday at a spread of 110 bps over Treasuries.

The railroad operator is based in Norfolk, Va.

Walgreens stable

Walgreens’ 3.45% notes due 2026 were unchanged at 161 bps offered early Wednesday, a market source said.

The company sold $1.9 billion of the notes (Baa2/BBB/BBB) on Thursday at Treasuries plus 165 bps.

Walgreens is a Deerfield, Ill.-based drugstore chain.

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