Morning Commentary: U.S. Bancorp notes firm; Credit Suisse paper eases; credit spreads soften

By Cristal Cody

Eureka Springs, Ark., April 25 – Investment-grades bonds traded mixed as the week opened, with market sources expecting a light volume week due to the Federal Reserve’s two-day policy meeting that ends on Wednesday.

U.S. Bancorp’s 3.1% subordinated medium-term notes due 2026 traded about 3 basis points better than where the paper priced on Thursday.

Credit Suisse Group Funding (Guernsey) Ltd.’s senior notes due 2026 softened 2 bps in the secondary market.

The Markit CDX North American Investment Grade series 23 index opened the day about 1 bp weaker at a spread of 74 bps.

The three-month Libor yield was up 1 bp from Friday at 64 bps.

U.S. Bancorp improves

U.S. Bancorp’s 3.1% notes due 2026 traded modestly better at 120 bps offered, a market source said.

The company sold $1 billion of the notes (A1/A-/AA-) on Thursday at a spread of Treasuries plus 123 bps.

U.S. Bancorp is a financial services holding company based in Minneapolis.

Credit Suisse eases

Credit Suisse Group Funding’s 4.55% notes due 2026 were quoted 2 bps softer early Monday at 245 bps offered, according to a market source.

Credit Suisse Group Funding sold $2 billion of the notes (Baa3/BBB+/A) on April 13 at 280 bps over Treasuries.

The financial services company is based in Zurich.

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