Morning Commentary: Investment-grade credit spreads leak wider; AbbVie, Reynolds notes firm

By Cristal Cody

Tupelo, Miss., June 24 – Investment-grade credit spreads leaked wider at the opening of the session on Wednesday, while new bonds traded mostly better over the morning.

AbbVie Inc.’s 3.6% senior notes due 2025 tightened 3 basis points.

Reynolds American Inc.’s senior notes (Baa3/BBB-) traded 1 bp to 3 bps better in the secondary market.

The Markit CDX North American Investment Grade series 23 index was 1 bp weaker at a spread of 66 bps early Wednesday.

AbbVie firms

AbbVie’s 3.6% notes due 2025 were quoted 3 bps tighter at 139 bps offered, according to a market source.

The company sold $3.75 billion of the notes (Baa1/A) on May 5 at Treasuries plus 145 bps.

AbbVie is a biopharmaceutical company based in Abbott Park, Ill.

Reynolds American better

Reynolds American’s 4.45% notes due 2025 firmed 2 bps to 190 bps offered, a market source said.

The company sold $2.5 billion of the notes on June 9 at a spread of Treasuries plus 205 bps.

Reynolds American’s 5.85% bonds due 2045 traded 2 bps better at 241 bps offered.

The company priced $2.25 billion of the bonds in the June 9 offering at Treasuries plus 270 bps.

The manufacturer and marketer of cigarettes and other tobacco products is based in Winston-Salem, N.C.

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