Primary quiet; new bonds soften; Barclays, Lloyds, Deutsche Bank widen; credit spreads ease

By Cristal Cody

Eureka Springs, Ark., June 24 – Investment-grade primary action stayed quiet on Friday, while bonds were mostly weaker following the surprise results of the Brexit vote.

Credit spreads widened over the day. The Markit CDX North American Investment Grade index opened Friday 9 basis points wider and closed 10 bps weaker at a spread of 87 bps.

U.S. high-grade primary action is expected to pick up in the week ahead after the mid-June lull with about $10 billion to $20 billion of volume forecast ahead of the July 4 holiday weekend.

Most of the new issues priced over the week were weaker in secondary trading on Friday.

Commonwealth Edison Co.’s $1.2 billion offering of mortgage bonds (A2/A-/A) priced in two tranches were quoted about 5 bps to 6 bps wider than issuance.

Broadridge Financial Solutions, Inc.’s 3.4% senior notes due 2026 traded on Friday at 177 bps bid, 173 bps offered, according to a market source.

Bank and financial paper mostly widened following Britain’s vote to leave the European Union.

Barclays plc’s paper moved out about 35 bps to 40 bps on Friday. Its 2.875% notes due 2020 widened to 200 bps bid from 165 bps bid on Thursday.

Lloyds Bank plc’s 2.7% notes due 2020 widened 20 bps during the session.

Deutsche Bank AG’s 4.1% notes due 2026 headed out 20 bps weaker.

Royal Bank of Scotland Group plc’s split-rated 4.8% notes due 2026 also ended the day lower.

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