Morning Commentary: Morgan Stanley paper tightens; Goldman, Citigroup improve

By Cristal Cody

Tupelo, Miss., June 23 – Bank and financial paper traded mostly better early Tuesday after credit spreads improved in the previous session, sources said.

Morgan Stanley’s 2.8% senior notes due 2020 tightened 4 basis points.

Goldman Sachs Group Inc.’s 3.75% senior notes due 2025 firmed 2 bps but traded about 1 bp weaker than issuance.

Citigroup Inc.’s 4.4% subordinated notes due 2025 traded mostly unchanged.

The Markit CDX North American Investment Grade series 23 index firmed 3 bps to a spread of 65 bps on Monday.

“The CDX Investment Grade Index is opening this morning flat to yesterday at 65 bps,” RBC Capital Markets LLC analysts said in a note. “The spread on all cash bonds widened by 4bps to 135.7 bps, driven by a 5.1 bps widening in the health care sector and 4.9 bps widening in the consumer staples sector.”

Morgan Stanley tightens

Morgan Stanley’s 2.8% senior notes due 2020 were quoted 4 bps tighter at 108 bps offered, according to a market source.

Morgan Stanley sold $2.5 billion of the notes (A3/A-/A) on June 11 at a spread of Treasuries plus 110 bps.

The financial services company is based in New York City.

Goldman firms

Goldman Sachs’ 3.75% senior notes due 2025 firmed 2 bps to 151 bps offered in the secondary market, a source said.

Goldman Sachs sold $2.25 billion of the notes (Baa1/A-/A) on May 19 at Treasuries plus 150 bps.

The financial services company is based in New York City.

Citigroup improves

Citigroup’s 4.4% subordinated notes due 2025 traded flat to modestly better at 204 bps offered, according to a market source.

Citigroup sold $2.5 billion of the notes (Baa3/BBB+/A-) on June 3 at Treasuries plus 208 bps.

The financial services company is based in New York City.

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