Morning Commentary: High-grade paper improves in early secondary trading; Goldman tightens

By Cristal Cody

Tupelo, Miss., Oct. 22 – Investment-grade bonds traded mostly stronger early Thursday as several corporate issuers, including the Coca-Cola Co. and Export Development Canada, prepared to tap the market over the day.

Goldman Sachs Group Inc.’s new notes traded about 3 basis points better at the start of the session.

Investment-grade secondary trading remained strong mid-week with $17.3 billion of issues traded on Wednesday, up from $16.7 billion on Tuesday, according to Trace.

The Markit CDX North American Investment Grade 25 index closed the previous day 1 bp wider at a spread of 82 bps.

Goldman improves

Goldman’s 4.25% subordinated notes due 2025 traded about 3 bps tighter at 216 bps offered, according to a market source.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Friday at a spread of Treasuries plus 230 bps.

The company’s 4.75% bonds due 2045 firmed about 3 bps to 181 bps offered in secondary trading.

The bonds (A3/A-/A) priced in a $1.75 billion tranche on Friday at Treasuries plus 192 bps.

The financial services company is based in New York City.

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