Midday Commentary: Citigroup, BP Capital notes trade better in secondary market

By Aleesia Forni

Virginia Beach, Va., May 8 - The pace of the investment-grade secondary market was "pretty quiet" early during Wednesday's session, though Tuesday's issues from Citigroup Inc. and BP Capital Markets plc were seen trading tighter at midday, a trader said.

BP Capital's $3 billion of notes, which priced in two parts, were quoted 2 bps to 4 bps better.

Meanwhile, Citigroup's $1.25 billion of 3.5% 10-year subordinated notes traded 3 bps tighter on the day.

The Markit CDX North American Investment Grade index was unchanged on Wednesday at a spread of 69 bps.

BP notes firm

BP Capital's $1.25 billion of 1.375% five-year notes was quoted 2 bps better at 63 bps bid, 60 bps offered on Wednesday, a trader said.

The notes were priced at a spread of Treasuries plus 68 bps.

The trader saw the company's $1.5 billion of 2.75% 10-year notes 4 bps better compared to levels seen late Tuesday at 104 bps bid, 101 bps offered.

BP sold the tranche of notes at 108 bps over Treasuries.

The sale also included $250 million of five-year floaters priced at par to yield Libor plus 51 bps.

The unit of oil company BP plc is based in London.

Citigroup tightens

In another deal from Tuesday's session, Citigroup's $1.25 billion of 3.5% 10-year subordinated notes (Baa3/BBB+/BBB+) firmed 3 bps to 175 bps bid, 173 bps offered on Wednesday.

The notes were sold at Treasuries plus 178 bps.

The financial services company is based in New York City.

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