Morning Commentary: Wells Fargo bonds tighten in secondary market; Bank of America modestly better

By Cristal Cody

Eureka Springs, Ark., Oct. 20 – New bank and financial bonds traded mixed in the secondary market early Thursday, with Wells Fargo & Co.’s paper tightening 10 basis points.

Wells Fargo’s $3.5 billion offering of 3% senior notes due 2026 that priced on Wednesday traded about 10 bps better than issuance.

Bank of America Corp.’s 3.248% senior notes due 2026 that priced on Tuesday traded flat to 1 bp tighter.

The three-month Libor yield was steady at the start of the session at 88 bps.

On Wednesday, $18.1 billion of investment-grade issues were traded, compared to $17.25 billion on Tuesday and $13.87 billion on Monday, according to Trace.

Wells Fargo tightens

Wells Fargo’s 3% senior notes due 2026 tightened to 120 bps offered in secondary trading, a market source said.

Wells Fargo priced $3.5 billion of the 10-year notes (A2/A/AA-) on Wednesday at a spread of 130 bps over Treasuries.

The retail, commercial and corporate banking services provider is based in San Francisco.

Bank of America firms

Bank of America’s 3.248% notes due 2027 traded flat to 1 bp tighter at 144 bps offered in the secondary market, a source said.

The bank sold $2.5 billion of the notes (Baa1/BBB+/A) on Tuesday at a spread of 150 bps over Treasuries.

The financial services company is based in Charlotte, N.C.

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