Morning Commentary: Credit spreads widen; Lloyds Bank paper improves; Celgene unchanged

By Cristal Cody

Tupelo, Miss., Aug. 24 – Investment-grade bonds opened the last full week of August mixed in secondary trading as stocks sold off over the morning and credit spreads widened, according to market sources.

The Markit CDX North American Investment Grade index was quoted opening the session at 86 basis points. The index closed on Friday at a spread of 83 bps.

Lloyds Bank plc’s 2.7% senior notes due 2020 that priced earlier in the month traded about 3 bps tighter in the secondary market.

Celgene Corp.’s 3.875% senior notes due 2025 brought to market at the start of the month were active but unchanged.

The three-month Libor yield was stable at 33 bps on Monday.

Lloyds firms

Lloyds Bank’s 2.7% notes due 2020 tightened about 3 bps in secondary trading to 108 bps offered, a market source said.

Lloyds sold the notes (A1/A/A+) in a $1 billion tranche on Aug. 10 at a spread of 110 bps over Treasuries.

The retail bank is based in London.

Celgene unchanged

Celgene’s 3.875% notes due 2025 were flat at 186 bps offered in secondary trading, a market source said.

The company priced $2.5 billion of the notes (Baa2/BBB+) on Aug. 3 at 185 bps over Treasuries.

The global biopharmaceutical company is based in Summit, N.J.

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