Morning Commentary: High-grade bonds mixed; Morgan Stanley stable; Walgreen soft; Apple flat

By Cristal Cody

Tupelo, Miss., Dec. 12 – Investment-grade bonds were mixed in secondary trading early Friday as market sentiment remains volatile, sources said.

Morgan Stanley & Co. Inc.’s 4.35% subordinated notes due 2026 traded mostly unchanged to 1 basis point better after widening 9 bps over the previous two sessions, a source said.

Walgreen Co. subsidiary Walgreens Boots Alliance Inc.’s 4.8% senior notes due 2044 were quoted 2 bps weaker in secondary trading.

Apple Inc.’s 3.45% notes due 2024 traded flat, according to a market source.

“An ugly week,” RBC Capital Markets, LLC analysts said in a note on Friday. “Cash spreads are 5 bps wider on U.S. investment grade bonds.”

The Markit CDX North American Investment Grade series 23 index eased 1 bp to a spread of 69 bps on Thursday.

Morgan Stanley active

Morgan Stanley’s 4.35% subordinated notes due 2026 traded flat to 1 bp tighter at 209 bps offered early Friday, a market source said.

The issue was quoted on Tuesday at 200 bps offered.

The notes climbed to 101.141 to yield 4.225% in early trading from 100.828 to yield 4.259% in Thursday’s session, a source said.

Morgan Stanley sold $2.25 billion of the notes (Baa3/BBB+/BBB+) on Sept. 3 at 99.37 to yield 4.42%. The bonds priced at Treasuries plus 195 bps.

The financial services company is based in New York City.

Walgreen eases

Walgreen’s 4.8% bonds due 2044 (Baa2/BBB/) eased 2 bps to 167 bps offered in secondary trading, a market source said.

The bonds opened lower at 104.444 to yield 4.525% from where the issue last traded at 105.115 to yield 4.485% on Thursday, according to a market source.

The company sold $1.5 billion of the bonds at 99.984 to yield 4.801% and with a spread of Treasuries plus 170 bps on Nov. 6.

The drugstore chain is based in Deerfield, Ill.

Apple unchanged

Apple’s 3.45% notes due 2024 (Aa1/AA+/) were unchanged at 81 bps offered, according to a market source.

The notes traded slightly lower at 103.433 to yield 3.027% from 103.457 to yield 3.024% on Thursday, a source said.

Apple sold $2.5 billion of the notes at a spread of Treasuries plus 77 bps on April 29, 2014. The notes priced at 99.916 to yield 3.46%.

The computer and mobile communications device company is based in Cupertino, Calif.

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