Morning Commentary: Barclays paper improves; Burlington Northern soft; credit spreads ease

By Cristal Cody

Tupelo, Miss., Sept. 1 – Investment-grade bonds were mixed in secondary trading, with long bonds trading 1 basis point tighter to 1 bp weaker early Tuesday.

Barclays plc’s 5.25% senior notes due 2045 continued to trade better over the morning from where the paper was quoted on Monday.

Burlington Northern Santa Fe LLC’s 4.7% debentures due 2045 traded about 1 bp weaker.

The Markit CDX North American Investment Grade index was seen 2 bps wider at a spread of 84 bps over the morning. The index eased 2 bps to a spread of 82 bps on Monday.

The CDX has ranged from a low spread of 60.4 bps to a high spread of 87.9 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

Barclays better

Barclays’ 5.25% notes due 2045 were seen early Tuesday tighter at 227 bps offered, a market source said.

The notes traded late Monday afternoon at 230 bps bid and earlier in the session at 232 bps offered.

Barclays sold $1.5 billion of the notes (Baa3/BBB/A) on Aug. 10 at a spread of Treasuries plus 235 bps.

The financial services company is based in London.

Burlington Northern soft

Burlington Northern’s 4.7% debentures due 2045 eased about 1 bp to 175 bps offered in secondary trading, a source said.

The company sold $650 million of the bonds (A3/BBB+) on Aug. 13 at Treasuries plus 185 bps.

Burlington Northern Santa Fe is a holding company for railroad transportation subsidiaries based in Fort Worth, Texas.

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