Morning Commentary: Intel bonds mixed; high-grade index off year tights; credit spreads flat

By Cristal Cody

Tupelo, Miss., July 24 – Investment-grade bonds were mixed in early trading on Friday with market participants looking ahead to the Federal Reserve’s policy meeting in the upcoming week.

Intel Corp.’s senior notes (A1/A+/ A+) brought to market on Wednesday traded better on the short end in the secondary market.

The Markit CDX North American Investment Grade index was unchanged at the start of the session at a spread of 70 basis points.

The U.S. corporate credit index was little changed over the week, Barclays analysts said in a note on Friday.

“The current 149 [bps] spread is the widest since the market sell-off of June 2013,” according to the note. “The underperformance of U.S. investment grade credit year-to-date has been stark. The seasonally slower late summer should hopefully clear up some of the supply pressures, and we remain optimistic that spreads will tighten through year-end.”

The three-month Libor yield was unchanged at 29 bps early Friday.

Intel mixed

Intel’s new 3.7% notes due 2025 were quoted flat to 1 bp tighter at 139 bps offered, according to a market source.

The company sold $1 billion of the notes on Wednesday as part of a $7 billion deal at a spread of Treasuries plus 140 bps.

Intel’s 4.9% bonds due 2045 were softer at 191 bps offered in secondary trading.

The bonds priced in a $2 billion tranche at Treasuries plus 185 bps.

Intel is a semiconductor chip maker based in Santa Clara, Calif.

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