Midday Commentary: Investment-grade spreads flat in quiet trade; ABN Amro eases

By Cristal Cody

Tupelo, Miss., Oct. 28 - Investment-grade bonds traded early Monday mostly unchanged from Friday's session, according to market sources.

In the secondary market, ABN Amro Bank NV's new 2.5% notes due 2018 eased about 2 basis points on the bid side in early trading.

"Quiet morning," a trader said. "Spreads in general look to be unchanged."

The Markit CDX North American Investment Grade series 21 index ended Friday flat at a spread of 72 bps.

More than $40 billion of new high-grade bond issuance hit the market the previous week, and market sources expect the upcoming week to be busy as issuers exit earnings blackout periods.

ABN eases

ABN Amro Bank's 2.5% notes due 2018 (A2/A/A+) traded early Monday at 120 bps bid, 118 bps offered, a trader said.

The paper was seen early Friday in a range from 118 bps offered to 120 bps offered.

ABN Amro sold $1 billion of the five-year notes on Wednesday at a spread of Treasuries plus 127 bps.

The bank and financial services company is based in Amsterdam.

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