Midday Commentary: Bank of America firms 10 bps; Dominion Gas better in morning session

By Cristal Cody

Tupelo, Miss., Oct. 18 - New investment-grade paper tightened early Friday as market tone continued to improve following the U.S. government reopening and budget deal to avoid a debt default, according to market sources.

Bank of America Corp.'s 2.6% notes due 2019, which priced on Thursday, traded 10 basis points tighter early Friday, a trader said.

Dominion Gas Holdings LLC's longer-dated tranches of senior notes, which were sold in a three-part offering on Thursday, firmed on the offered side in secondary trading on Friday.

BofA tightens

Bank of America's 2.6% notes due 2019 (Baa2/A-/A) tightened to 118 bps bid, 115 bps offered in Friday's morning trade, a trader said.

Bank of America sold $2.5 billion of the notes at Treasuries plus 128 bps on Thursday.

The financial services company is based in Charlotte, N.C.

Dominion Gas better

Dominion Gas' $1.2 billion three-part offering (A3/A-/BBB+), which priced on Thursday, also traded mostly better following strong investor demand, according to market sources.

The tranche of 1.05% notes due 2016 was flat at 45 bps bid, a trader said. The company sold $400 million of the three-year notes at a spread of Treasuries plus 45 bps.

The 3.55% notes due 2023 tightened to 93 bps offered, in from where Dominion Gas sold $400 million of the notes at Treasuries plus 97 bps.

The long-dated offering of 4.8% bonds due 2043 were quoted early Friday at 101 bps offered. The company priced $400 million of the 30-year bonds at Treasuries plus 112 bps.

"The 30-year offering was anticipated to come at a spread of 130 bps over Treasuries, but in light of strong demand, it priced at only 112 bps over the curve," RBC Capital Markets, LLC analysts said in a note on Friday.

Dominion Gas is a wholly owned subsidiary of Richmond, Va.-based energy producer and transporter Dominion Resources Inc.

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