Morning Commentary: HSBC paper tightens; Citigroup eases; secondary trading volume strong

By Cristal Cody

Eureka Springs, Ark., March 3 – High-grade bonds were mixed in early secondary trading at the start of the session on Thursday.

HSBC Holdings plc’s senior notes (A1/A/AA-) that priced on Tuesday traded more than 10 basis points tighter in the secondary market.

Citigroup Inc.’s new 4.6% subordinated notes due 2026 were quoted 3 bps softer.

The three-month Libor yield was unchanged at 63 bps.

Investment-grade secondary trading volume has been robust over the week. On Wednesday, the total volume of high-grade issues traded climbed to $22.46 billion from $21.2 billion on Tuesday and $18.3 billion on Monday, according to Trace.

HSBC tightens

HSBC Holdings’ 3.4% notes due 2021 tightened to 198 bps offered in the secondary market, a source said.

HSBC sold $3 billion of the notes on Tuesday at a spread of Treasuries plus 215 bps.

The company’s $3 billion tranche of 4.3% notes due 2026, which priced at Treasuries plus 250 bps, were quoted better at 237 bps offered in secondary trading.

The banking and financial services group is based in London.

Citigroup softens

Citigroup’s 4.6% subordinated notes due 2026 were trading 3 bps weaker at 281 bps offered, according to a market source.

Citigroup sold $1.5 billion of the notes (Baa3/BBB/A-) on Tuesday at a spread of Treasuries plus 280 bps.

The banking and financial services company is based in New York.

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