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Midday Commentary: Market quiet, spreads tight; RBS firms, Barclays eases in early trade
By Cristal Cody
Tupelo, Miss., May 23 - Market activity was quiet early Friday with some desks already thinning ahead of the early close following more than $30 billion of investment-grade issuance over the week, sources said.
The U.S. bond markets are scheduled to close early on Friday and will close on Monday for the Memorial Day holiday.
Trading activity was light in midday trading, but credit spreads remained tight, a source said.
The Markit CDX North American Investment Grade series 22 index closed 1 basis point tighter at a spread of 64 bps on Thursday.
Financial issues were mixed following deals this week from issuers including Royal Bank of Scotland Group plc, Credit Suisse AG and Deutsche Bank AG, according to market sources.
In early trading, Royal Bank of Scotland's 5.125% subordinated tier 2 notes due 2024 tightened 6 bps from where the notes priced on Wednesday, according to a market source.
Barclays Bank plc's 3.75% senior notes due 2024 priced in the previous week traded about 5 bps wider, a source said.
RBS firms
Royal Bank of Scotland's 5.125% notes due 2024 (Ba3/BB+/BBB-) traded better at 264 bps offered, according to a market source.
Royal Bank of Scotland sold $2.25 billion of the 10-year subordinated tier 2 notes on Wednesday at a spread of Treasuries plus 270 bps.
The financial services company is based in Edinburgh.
Barclays eases
Barclays Bank's 3.75% notes due 2024 (A2/A/A) traded early Friday at 115 bps offered, according to a market source.
The bank sold $2.25 billion of the 10-year notes at Treasuries plus 110 bps on May 12.
Barclays Bank is a London-based financial services provider.
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