Morning Commentary: Credit spreads weak; Citigroup notes tighten; Charter Communications firms

By Cristal Cody

Tupelo, Miss., Aug. 27 – High-grade bonds were flat to mostly better in secondary trading early Thursday with traders focused on economic data and the Federal Reserve’s expected kickoff after the market closes of its annual Jackson Hole, Wyoming, policy symposium.

Citigroup Inc.’s 4.4% subordinated notes due 2025 were quoted 5 basis points tighter.

Charter Communications Inc.’s 6.484% senior secured notes due 2045 firmed 5 bps.

The Markit CDX North American Investment Grade index ended 4 bps better at a spread of 83 bps on Wednesday.

“IG credit spreads have now widened to 167 bps, which is about 50 bps wider than levels observed in March and 70 bps wider than the cycle low put in last July,” according to a RBC Capital Markets, LLC note on Thursday.

Citigroup tightens

Citigroup’s 4.4% subordinated notes due 2025 improved 5 bps in secondary trading to 218 bps offered, according to a market source.

Citigroup sold $2.5 billion of the notes (Baa3/BBB+/A-) on June 3 at Treasuries plus 208 bps.

The financial services company is based in New York City.

Charter improves

Charter Communications’ 6.484% notes due 2045 were seen 5 bps tighter at 348 bps offered, a market source said.

The company sold $3.5 billion of the bonds (Ba1/BBB-) on July 9 at a spread of Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

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