Midday Commentary: Recent deals trading better in secondary market despite muted session

By Aleesia Forni

Virginia Beach, Va., July 26 - Though spreads were slightly wider overall early Friday, one trader noted that the investment-grade bond market's pace was "pretty quiet" at mid-morning.

The Markit CDX North American Investment Grade index was 1 basis point wider at a spread of 77 bps.

Still, Thursday's new issues from PepsiCo, Inc. and Bank of New York Mellon Corp. continued to see tightening in the secondary market early during the session.

The trader saw BNY Mellon's new fixed-rate notes trading 1 bp better on the day.

The $600 million of 2.1% notes due 2018 was quoted at 72 bps bid, 67 bps offered following Thursday's pricing with a spread of Treasuries plus 75 bps.

The New York-based financial services company also sold $500 million of floating-rate notes due 2018 at Libor plus 56 bps.

In another recent deal, PepsiCo's $850 million tranche of 2.25% notes due 2019 was quoted 3 bps better compared to levels seen late Thursday at 83 bps bid, 79 bps offered, a trader said.

The notes were priced at a spread of Treasuries plus 90 bps.

The two-part $1.7 billion sale also included $850 million of two-year floating-rate notes sold at par to yield Libor plus 20 bps.

PepsiCo is a Purchase, N.Y.-based global food and beverage company.

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