Morning Commentary: Spreads mostly flat; AIG, CBS new deals firm in secondary market

By Aleesia Forni

Virginia Beach, July 8 – The high-grade bond market was mostly quiet to open the trading day on Wednesday.

Recently priced deals from American International Group Inc. and CBS Corp. were trading tighter in the secondary market early during the session.

The Markit CDX North American Investment Grade series 23 index was 1 basis point wider at 72 bps at mid-morning.

AIG notes firm

Tranches of AIG’s new $2.5 billion offering of senior notes (Baa1/A-/BBB+), which sold in three parts on Tuesday, were quoted tighter compared to their new issue spreads.

The New York City-based insurance company’s $1.25 billion of 3.75% 10-year notes were 1 bp tighter at 154 bps bid, 153 bps offered, according to a market source.

The notes priced at Treasuries plus 155 bps.

The company’s $500 million of 4.7% 20-year bonds, which sold with a spread of Treasuries plus 170 bps, were 3 bps better at 167 bps bid, 164 bps offered.

The $750 million of 4.8% 30-year notes firmed 1 bp to 179 bps bid, 176 bps offered. The notes sold at Treasuries plus 180 bps.

CBS tighter

In other trading on Wednesday, CBS’ $800 million of 4% 10-year notes traded 4 bps better at 196 bps bid, 192 bps offered, a market source said.

The New York City-based broadcasting company sold the notes with a spread of 200 bps over Treasuries.

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