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Morning Commentary: Spreads flat to tighter; Bank of America firms; AutoZone tightens
By Aleesia Forni
Virginia Beach, April 21 – Spreads in the high-grade bond secondary market were flat to tighter early Tuesday.
The Markit CDX North American Investment Grade series 23 index was unchanged at a spread of 63 bps.
Recently priced bonds from Bank of America Corp. and AutoZone Inc. traded better early during the session.
BofA tightens
Bank of America’s recently issued $5 billion of notes, which priced in three tranches during Thursday’s session, were trading tighter on Tuesday, a market source said.
The bank’s $2 billion of 2.25% five-year senior notes (Baa2/A-/A), which priced at Treasuries plus 100 bps, were 1 bp tighter at 97 bps bid, 95 bps offered.
The $500 million 4.75% 30-year subordinated notes (Baa3/BBB+/BBB+), which sold at 220 bps over Treasuries, were quoted at 206 bps offered.
The financial services company based in Charlotte, N.C.
AutoZone firms
AutoZone’s newly printed $650 million two-part senior notes issuance (Baa1/BBB/BBB) was also trading better on Tuesday.
The company’s $250 million of 2.5% notes due 2021 were 4 bps tighter at 114 bps bid.
The notes sold on Tuesday at Treasuries plus 118 bps.
Meanwhile, the company’s $400 million of 3.25% notes due 2025, which priced at Treasuries plus 138 bps, traded 2 bps tighter at 136 bps bid, 134 bps offered.
J.P. Morgan Securities LLC, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the joint bookrunners.
Proceeds will be used for working capital, capital expenditures, new store openings, repurchases of common stock, acquisitions or general corporate purposes, which may include repaying, redeeming or repurchasing existing debt.
AutoZone is a Memphis-based automotive parts retailer.
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