Midday Commentary: High-grade bonds firm in early session in front of heavy deal line-up

By Cristal Cody

Tupelo, Miss., Sept. 25 - Investment-grade bonds tightened early Wednesday ahead of a heavy line-up of new deals expected to price later in the day, according to market sources.

"Tons of new issues this A.M.," one trader said. "Spreads look a bit tighter."

Credit spreads have moved marginally tighter since Monday, another source said.

The Markit CDX North American Investment Grade series 21 index firmed 1 basis point to close on Tuesday at a spread of 79 bps.

In the secondary market early Wednesday, Marriott International Inc.'s new 3.375% notes due 2020 traded about 5 bps better since the bonds priced on Tuesday, according to a trader.

Marsh & McLennan Co. Inc.'s two tranches of notes (Baa2/BBB/BBB+) sold the previous day tightened on the offered side in the morning session, a trader said.

Marriott firms

Marriott's new 3.375% notes due 2020 (Baa2/BBB/) tightened another 2 bps in secondary trading from Tuesday afternoon to 140 bps bid, 137 bps offered early Wednesday, a trader said.

Marriott sold $350 million of the senior notes at Treasuries plus 145 bps on Tuesday. The notes traded going out on Tuesday at 142 bps bid, 141 bps offered.

The lodging company is based in Bethesda, Md.

Marsh & McLennan tightens

Marsh & McLennan's 2.55% notes due 2018 traded early Wednesday at 103 bps offered, in from 105 bps offered late Tuesday, according to traders.

The firm sold $250 million of the five-year notes at Treasuries plus 115 bps.

Marsh & McLennan's second tranche of 4.05% notes due 2023 traded at 133 bps offered in the morning session, 3 bps better than where the notes were seen Tuesday afternoon.

The company sold $250 million of the 10-year notes at a spread of Treasuries plus 145 bps.

Marsh & McLennan is a New York City-based professional services firm.

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