Morning Commentary: High-grade spreads flat in quiet activity; Goldman eases; Monsanto firms

By Cristal Cody

Tupelo, Miss., July 1 – Investment-grade bond spreads opened mostly unchanged on Tuesday after spreads eased in the previous session with market activity expected to stay light over the short holiday week, sources said.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 59 bps on Monday.

The Canadian bond markets closed early on Monday and are closed on Tuesday for the Canada Day holiday.

The U.S. bond markets will close early on Thursday and close on Friday for the Independence Day holiday.

Bank and financial paper was soft in early trading following Goldman Sachs Group Inc.’s $4 billion two-part offering of senior notes on Monday, according to a market source.

Goldman’s existing issues eased in the secondary market, a source said.

Monsanto Co.’s 4.4% senior notes due 2044 that were brought to market in the previous week tightened in secondary trading, according to a market source.

Goldman eases

Goldman Sachs’ 4% notes due 2024 (Baa1/A-/A) widened about 8 bps to 128 bps offered, according to a market source early Tuesday.

The notes climbed to 103.86 in midday trading from 101.47 on Monday, a source said.

Goldman sold $3 billion of the 10-year notes on Feb. 26 at 137.5 bps over Treasuries, or 99.698 to yield 4.037%.

The financial services company is based in New York City.

Monsanto improves

Monsanto’s 4.4% senior notes due 2044 (A3/BBB+/A-) firmed 2 bps to 106 bps offered, a source said.

The notes edged up to 99.86 over the morning from 99.82 on Monday, according to a market source.

Monsanto sold $1 billion of the bonds at 110 bps over Treasuries, or 99.207 to yield 4.448%, on Thursday.

The agricultural company is based in St. Louis.

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