Morning Commentary: Lloyds tightens; MetLife Global softens; credit spreads improve

By Cristal Cody

Tupelo, Miss., Nov. 25 – New investment-grade bonds were mixed in secondary trading early Wednesday, while credit spreads opened the session tighter.

Lloyds Banking Group plc’s 5.3% tier 2 subordinated notes due 2045 have tightened nearly 15 basis points since the bonds priced on Monday.

The 2.5% funding agreement-backed notes due 2020 that MetLife Global Funding I sold on Monday traded 2 bps softer in the secondary market.

The Markit CDX North American Investment Grade 25 index was quoted 1 bp tighter over the morning at a spread of 85 bps.

The three-month Libor yield rose 1 bp to 39 bps early Wednesday.

Lloyds stronger

Lloyds Banking Group’s 5.3% tier 2 subordinated notes due 2045 remained better in secondary trading at 216 bps offered, a source said.

Lloyds sold $500 million of the notes (Baa2/BBB-/A-) on Monday at a spread of Treasuries plus 230 bps.

The retail bank is based in London.

MetLife Global eases

MetLife Global Funding’s 2.5% notes due 2020 were softer at 85 bps offered in secondary trading, a market source said.

The company sold $750 million of the notes (Aa3/AA-/AA-) on Monday at Treasuries plus 83 bps.

The issuer is a unit of New York City- based insurance and employee benefits company MetLife Inc.

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