Midday Commentary: High-grade bonds see 'brutal start' to week; spreads widen 2 bps to 5 bps

By Aleesia Forni

Columbus, Ohio, Sept. 25 - Investment-grade bonds are seeing a "brutal start" to the week, one trader said on Tuesday.

"[There is] definitely a weaker tone overall," the trader said, adding that spreads were 2 basis points to 5 bps wider at midday.

Meanwhile, Monday's issuances from United Parcel Service, Inc. and Newcrest Finance Pty. Ltd. were seen unchanged to 7 bps tighter in the secondary market.

Newcrest notes tighten

Australia's Newcrest Finance's $750 million 4.2% 10-year notes traded at 252 bps bid, 247 bps offered, the trader said.

The notes sold at a spread of Treasuries plus 255 basis points.

The company's $250 million of reopened 5.75% bonds due 2041 traded flat at 280 bps bid, 275 bps offered.

The unit of Newcrest Mining Ltd., which is in the business of exploration and the sale of gold, copper and silver, is based in Melbourne, Australia.

UPS three-part deal active

In other trading, UPS' $375 million of 1.125% five-year notes traded 7 bps tighter at 43 bps bid, 38 bps offered following Monday's pricing at Treasuries plus 50 bps.

The $1 billion 2.45% 10-year bonds, which sold with a spread of 75 bps over Treasuries, were unchanged at 75 bps bid, 72 bps offered.

A $375 million tranche of 3.625% 30-year bonds traded 1 bps tighter at 79 bps bid, 76 bps offered.

The notes sold with a spread of 80 bps over Treasuries.

The package delivery and supply chain management company is based in Atlanta.

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