Midday Commentary: Investment-grade bonds wider on Syria concerns; traders on 'sidelines'

By Cristal Cody

Tupelo, Miss., Aug. 28 - Investment-grade bonds opened Wednesday unchanged to slightly weaker, and the 30-year Treasury bond sold off nearly a point over the morning session, according to market sources.

The Markit CDX Series 20 North American Investment Grade index ended Tuesday 5 basis points wider at a spread of 84 bps.

"Things are a little bit wider, but nothing dramatic - 1-2 [bps] wider," a trader said early Wednesday. "There is a lot of uncertainty in the market regarding the Syria decision, so a lot of people are standing on the sidelines."

In the secondary market, International Finance Corp.'s 1.75% notes due 2018 (Aaa/AAA/) priced on Tuesday traded at 20 bps bid, 19 bps offered, a trader said.

The Washington, D.C.-based World Bank member and lender to the private sector in developing countries sold $3.5 billion of the notes at a spread of mid-swaps plus 2 bps.

Santander unchanged

In other trading, Santander Holdings USA Inc.'s 3.45% senior notes due 2018 (Baa2/BBB/BBB) were mostly unchanged at 164 bps bid, 163 bps offered early Wednesday, a trader said.

The notes were seen late Monday offered at 163 bps.

Boston-based Santander Holdings, the parent company of Sovereign Bank and a subsidiary of Spain's Banco Santander, SA, sold $500 million of the notes at a spread of Treasuries plus 180 bps on Aug. 21.

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