Morning Commentary: Canadian Pacific Railway notes firm; Rabobank Nederland eases; CDX soft

By Cristal Cody

Tupelo, Miss., July 31 – New high-grade bonds priced over the week were mixed in early trading on Friday, while credit spreads weakened, sources said.

Canadian Pacific Railway Co.’s new 4.8% senior notes due 2045 that priced on Wednesday traded about 3 basis points better.

Rabobank Nederland’s 4.375% subordinated tier 2 notes due 2025 brought to market on Tuesday eased 1 bp in secondary trading.

The Markit CDX North American Investment Grade index was 2 bps softer at the start of the session after it closed 1 bp wider at a spread of 71 bps on Thursday.

Canadian Pacific improves

Canadian Pacific Railway’s 4.8% bonds due 2045 firmed to about 177 bps offered in secondary trading, a market source said.

The company sold $550 million of the bonds (Baa1/BBB+) at Treasuries plus 180 bps on Wednesday as part of an $800 million two-part offering.

The railroad operator is based in Calgary, Alta.

Rabobank Nederland soft

Rabobank Nederland’s 4.375% notes due 2025 eased 1 bp to 211 bps offered, a market source said.

The company sold $1.5 billion of the notes (A3/BBB+/A) at a spread of Treasuries plus 215 bps in a $2.75 billion two-tranche deal on Tuesday.

Rabobank Nederland is a financial services company based in Utrecht, the Netherlands.

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