Morning Commentary: High-grade bonds mixed; Wells Fargo softens; credit spreads widen

By Cristal Cody

Eureka Springs, Ark., June 10 – Investment-grade bonds were mixed in the secondary market early Friday, while sovereign bond yields dropped, sources report.

Wells Fargo & Co.’s new 4.4% subordinated notes due 2046 were quoted trading about 2 basis points weaker than issuance in the secondary market.

The Markit CDX North American Investment Grade index opened 4 bps weaker at a spread of 79 bps.

The three-month Libor yield was unchanged at 66 bps.

High-grade secondary trading volume dropped to $15.76 billion on Thursday, compared to $18.34 billion on Wednesday, $16.9 billion on Tuesday and $13.17 billion on Monday, according to Trace.

Wells Fargo eases

Wells Fargo’s 4.4% notes due 2046 traded at 190 bps offered in the secondary market, a source said.

Wells Fargo sold $2 billion of the notes on Tuesday at a spread of 188 bps over Treasuries.

The financial services company is based in San Francisco.

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