Morning Commentary: Berkshire Hathaway notes strengthen; HSBC firms; credit spreads tighten

By Cristal Cody

Eureka Springs, Ark., March 10 – Berkshire Hathaway Inc.’s senior notes (Aa2) printed earlier in the week continued to trade more than 10 basis points better than issuance in the secondary market early Thursday.

HSBC Holdings plc’s new 4.3% senior notes due 2026 were seen about 5 bps tighter in secondary trading.

The Markit CDX North American Investment Grade index firmed 5 bps to a spread of 92 bps at the start of the day.

The three-month Libor yield opened the session unchanged at 64 bps.

Secondary trading volume climbed to $20.84 billion on Wednesday, up from $17.8 billion of high-grade issues traded on Tuesday, according to Trace.

Berkshire Hathaway strong

Berkshire Hathaway’s 3.125% notes due 2026 remained tight early Thursday at 113 bps offered in the secondary market, a source said.

The company sold $2.5 billion of the notes on Tuesday at a spread of Treasuries plus 130 bps.

Berkshire Hathaway is an Omaha-based holding company for subsidiaries.

HSBC tightens

HSBC Holdings’ 4.3% notes due 2026 traded 5 bps tighter on Thursday at 228 bps offered, according to a market source.

HSBC sold $3 billion of the notes (A1/A/AA-) on March 1 at a spread of Treasuries plus 250 bps.

The banking and financial services group is based in London.

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