Midday Commentary: High-grade bonds mostly flat to wider on low volumes; JPMorgan better

By Cristal Cody

Tupelo, Miss., Aug. 16 - Investment-grade bond spreads traded mostly unchanged to softer from Thursday's overall weakness with some paper tightening in the early session on Friday, traders said.

"Spreads in general look a tad wider," a trader said.

Investment-grade bond spreads closed Thursday about 3 basis points to 7 bps wider.

"Beginning of yesterday to the morning, things were bad as much as 15 basis points wider, but as the day went on it got better," another trader said. "This morning, there's just not enough volume to tell any change but everything's mostly unchanged from yesterday's close."

The Markit CDX Series 20 North American Investment Grade index closed Thursday 5 bps wider at a spread of 80 bps.

JPMorgan Chase & Co.'s 5.625% subordinated bonds due 2043 (A3/A-/A) sold on Wednesday traded softer in Friday's early session but better from Thursday's weakness where they had moved out as wide as 201 bps bid, according to traders.

The New York City-based financial services company sold $750 million of the 5.625% bonds at a spread of Treasuries plus 190 bps.

"They've tightened a little bit since yesterday," one trader said. "Yesterday, I saw them at 200 [bps bid], 195 [bps offered], but today I'm seeing them 199 [bps bid], 194 [bps offered]," the trader said.

A trader at another desk saw the bonds tighter at 195 bps bid, 193 bps offered early Friday.

Broadridge Financial Solutions, Inc.'s 3.95% senior notes due 2020 (Baa1/BBB/BBB+) priced on Wednesday bucked the weaker trend on Thursday and firmed to 180 bps bid, 178 bps offered, a trader said.

The notes were unchanged early Friday.

"Despite the overall market widening, that one tightened a little bit," the trader said.

Broadridge sold $400 million of the notes at a spread of Treasuries plus 185 bps.

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