Morning Commentary: Supply light; Gilead improves; Ingredion tightens; credit spreads firm

By Cristal Cody

Eureka Springs, Ark., Sept. 19 – Investment-grade bonds traded mostly better early Monday ahead of supply expected from American Airlines, Inc., Hess Corp. and S&P Global Inc.

Gilead Sciences Inc.’s 2.95% senior notes due 2027 tightened about 1 basis point from Friday.

Ingredion Inc.’s 3.2% senior notes due 2026 traded 10 bps better than where the bonds priced on Thursday.

About $30 billion of high-grade volume is expected over the week as traders and investors focus on mid-week monetary policy meetings from the Federal Reserve and Bank of Japan.

The Markit CDX North American Investment Grade index opened Monday about 1 bp better at a spread of 75 bps.

The three-month Libor yield was up 1 bp to 86 bps early Monday.

Gilead Sciences firms

Gilead Sciences’ 2.95% notes due 2027 traded about 1 bp tighter early Monday at 123 bps bid, according to a market source.

The bonds (A3/A) were quoted on Friday at 124 bps bid, 121 bps offered.

The company sold $1.25 billion of the 10-year notes on Thursday at 125 bps over Treasuries.

The biopharmaceutical company is based in Foster City, Calif.

Ingredion tightens

Ingredion’s 3.2% senior notes due 2026 tightened to 140 bps bid in the secondary market, a source said.

Ingredion priced $500 million of the notes (Baa2/BBB/BBB) on Thursday at a spread of 150 bps over Treasuries.

The maker of starches and sweeteners is based in Westchester, Ill.

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