Morning Commentary: General Motors tightens; IBM eases; high-grade credit spreads firm

By Cristal Cody

Tupelo, Miss., Feb. 22 – New investment-grade corporate bonds opened Monday’s session mixed in secondary trading.

General Motors Co.’s senior notes (Ba1/BBB-/BBB-) that priced in a $2 billion two-part offering on Thursday traded more than 10 basis points tighter in the secondary market on Monday.

International Business Machines Corp.’s 3.45% senior notes due 2026, which were brought to market in the previous week, eased 6 bps from Friday’s session.

Credit spreads were better at the start of the day. The Markit CDX North American Investment Grade index opened 2 bps tighter at a spread of 116 bps.

General Motors stronger

General Motors’ 6.6% notes due 2036 firmed to 387 bps offered in secondary trading, a market source said.

The company sold $1.25 billion of the 20-year bonds on Thursday at Treasuries plus 400 bps.

General Motors’ 6.75% notes due 2046, which priced in a $750 million tranche on Thursday at Treasuries plus 415 bps, tightened to 398 bps offered in the secondary market.

The automaker is based in Detroit.

IBM softens

IBM’s 3.45% notes due 2026 traded 6 bps weaker early Monday at 170 bps offered, according to a market source.

The company sold $1.35 billion of the notes (Aa3/A-/A+) on Tuesday at a spread of 170 bps over Treasuries.

The information technology and computer company is based in Armonk, N.Y.

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