Morning Commentary: Discover Bank mostly unchanged; JPMorgan flat; Libor yield up; CDX stable

By Cristal Cody

Eureka Springs, Ark., July 25 – Investment-grade bonds traded mostly unchanged early Monday ahead of strong supply on tap for the day from issuers including Unilever Capital Corp. and First Republic Bank, while the market absorbed news that Verizon Communications Inc. will buy Yahoo! Inc.’s operating business.

In the secondary market, Discover Bank’s $1 billion offering of 3.45% notes due 2026 that priced on Thursday traded mostly unchanged but about 5 basis points better than issuance.

JPMorgan Chase & Co.’s 2.95% senior notes due 2026 were flat.

The three-month Libor yield was up 2 bps to 72 bps early Monday.

The Markit CDX North American Investment Grade index opened the day unchanged at a spread of 71 bps.

On Friday, $11.5 billion of investment-grade issues were traded, according to Trace.

Discover mostly flat

Discover Bank’s 3.45% notes due 2026 traded mostly unchanged to modestly softer at 185 bps offered, according to a market source.

The notes were seen on Friday afternoon at 186 bps bid, 184 bps offered.

The company sold $1 billion of the notes (Baa3/BBB/BBB+) on Thursday at 190 bps over Treasuries.

Discover Bank is a banking and payment services company based in Riverwoods, Ill.

JPMorgan steady

JPMorgan Chase’s 2.95% notes due 2026 were unchanged from Friday at 135 bps offered, according to a market source.

JPMorgan Chase sold $3 billion of the notes (A3/A-A+) on July 14 at a spread of 145 bps over Treasuries.

The financial services company is based in New York City.

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