Morning Commentary: High-grade bonds improve; Goldman, JPMorgan tighten; credit spreads firm

By Cristal Cody

Tupelo, Miss., Dec. 23 – High-grade corporate bonds and credit spreads opened mostly stronger on Wednesday, while secondary trading continues to thin ahead of the Christmas holiday.

Goldman Sachs Group Inc.’s 4.25% subordinated notes due 2025 traded 3 basis points tighter.

JPMorgan Chase & Co.’s 2.55% senior notes due 2020 firmed 2 bps in the secondary market.

The Markit CDX North American Investment Grade 25 index was 2 bps better from Tuesday’s close at a spread of 91 bps over the morning.

The three-month Libor yield was unchanged at 59 bps early Wednesday.

On Tuesday, $8.5 billion of investment-grade bonds were traded, slightly up from Monday’s total trading volume of $8.1 billion, according to Trace.

Goldman firms

Goldman’s 4.25% subordinated notes due 2025 firmed 3 bps to 206 bps offered, a market source said early Wednesday.

The notes traded flat going out on Tuesday at 210 bps bid.

Goldman sold $2 billion of the notes (Baa2/BBB+/A-) on Oct. 16 at a spread of Treasuries plus 230 bps.

The financial services company is based in New York City.

JPMorgan perks up

JPMorgan’s 2.55% notes due 2020 traded 2 bps tighter at 98 bps offered, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A/A+) on Oct. 22 at a spread of Treasuries plus 123 bps.

The financial services company is based in New York City.

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