Morning Commentary: Primary action set; TD Bank tightens; CDX unchanged; Libor yield rises

By Cristal Cody

Eureka Springs, Ark., Sept. 12 – A handful of investment-grade issuers are set to tap the primary market on Monday, while bonds were mostly mixed in secondary trading over the morning.

LegacyTexas Financial Group, Inc., Southside Bancshares, Inc. and Interstate Power and Light Co. are in the deal pipeline.

In the secondary market, Toronto-Dominion Bank’s new 3.625% non-viability contingent capital subordinated notes due 2031 tightened more than 10 basis points.

The Markit CDX North American Investment Grade index opened mostly unchanged at a spread of 76 bps after widening 4 bps on Friday.

The three-month Libor yield was up 2 bps from Friday to 85 bps on Monday.

On Friday, $15.69 billion of investment-grade bonds were traded, according to Trace.

Toronto-Dominion Bank’s 3.625% notes due 2031 tightened to 193 bps bid in the secondary market, a source said.

The bank sold $1.5 billion of the non-viability contingent capital subordinated notes (A2/A-/DBRS: AL) on Thursday at a spread of 205 bps over Treasuries.

The notes bear a 3.625% fixed rate to but excluding Sept. 15, 2026 and then bear a rate at five-year mid-swaps plus 220.5 bps thereafter to but excluding Sept. 15, 2031.

The bank and financial services company is based in Toronto.

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