Midday Commentary: Merck notes trade tighter in high-grade secondary market

By Aleesia Forni

Virginia Beach, Va., May 20 - Last week's jumbo offering from Merck & Co. Inc. traded tighter in the secondary market on Monday as players gear up for what could be another active week of issuance, one market source said early during the session.

Meanwhile, the Markit CDX Series 20 North American Investment Grade index was unchanged at a spread of 70 basis points.

Merck's $1 billion of 0.7% notes due 2016 were quoted 3 bps tighter at 27 bps bid, 25 bps offered at midday.

The notes priced at 32 bps over Treasuries on May 16.

Meanwhile, the $1 billion of 1.3% notes due 2018 were quoted 2 bps better at 49 bps bid, 46 bps offered following Wednesday's pricing with a spread of 52 bps over Treasuries.

The $1.75 billion of 2.8% notes due 2023 traded 1 bp tighter on Monday at 83 bps bid, 80 bps offered.

The notes were sold at Treasuries plus 87 bps.

The $1.25 billion of 4.15% notes due 2043 firmed 2 bps to 97 bps bid, 94 bps offered following their sale at Treasuries plus 102 bps.

The sale also included $500 million of three-year floating-rate notes priced at par to yield Libor plus 19 bps and $1 billion of five-year floaters sold at par to yield Libor plus 36 bps.

The health-care company is based in Whitehouse Station, N.J.

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