Midday Commentary: Investment-grade market mostly quiet in early trade; Santander tightens

By Cristal Cody

Tupelo, Miss., Nov. 1 - Market action slowed early Friday with investment-grade bonds mostly unchanged in secondary trading, while Santander UK plc's deal sold in the previous session tightened 16 basis points, according to informed sources.

In other new issue trading, Diamond Offshore Drilling's senior notes and Citigroup Inc.'s paper traded mostly flat from Thursday's session.

"Everything's pretty much unchanged," one trader said early Friday. "There's not too much going on today."

The Markit CDX North American Investment Grade series 21 index ended Thursday flat at a spread of 73 bps.

Santander firms

The 5% subordinated notes due 2023 that Santander (A2/A/A) priced on Thursday tightened to 234 bps bid, 231 bps offered in secondary trading early Friday, a trader said.

"This deal is performing well," the trader said.

Santander sold $1.5 billion of the notes with a spread of Treasuries plus 250 bps.

The financial services company is based in London.

Diamond Offshore flat

Diamond Offshore Drilling's senior notes traded unchanged from where they went out on Thursday in aftermarket trading after the deal priced, according to traders.

The company's 4.875% notes due 2043 were flat at 115 bps bid, 114 bps offered, a trader said during early trading on Friday.

Diamond Offshore Drilling sold $750 million of the 30-year notes at Treasuries plus 120 bps.

The offshore oil and gas drilling contractor is based in Houston.

Citi eases

In other early trading, Citigroup's new 4.95% senior notes due Nov. 7, 2043 (Baa2/A-/A) eased 1 bp to 131 bps bid, 130 bps offered, a trader said.

Citigroup priced $500 million of the 30-year notes with a spread of Treasuries plus 130 bps.

The financial services company is based in New York.

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