Midday Commentary: Investment-grade bond spreads narrow; Entergy Louisiana trades 1 bp better

By Cristal Cody

Tupelo, Miss., Aug. 20 - Investment-grade bond spreads narrowed early Tuesday and recovered some weakness from the two-day sell-off in Treasuries, according to market sources.

The Markit CDX Series 20 North American Investment Grade index widened 2 basis points on Monday to a spread of 84 bps.

In the secondary market, Entergy Louisiana LLC's new 4.05% mortgage bonds due 2023 remained 1 bp tighter on the bid side at 119 bps bid, 115 bps offered on light volume early Tuesday, according to traders. The bonds went out Monday at 119 bps bid, 114 bps offered.

The Jefferson, La.-based energy provider sold $325 million of the mortgage bonds at a spread of Treasuries plus 120 bps in Monday's session.

Market activity is expected to remain light on Tuesday, sources said.

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