Midday Commentary: Strong market tone fades by midday; Hewlett-Packard's notes active

By Aleesia Forni

Columbus, Ohio, Nov. 14 - The investment-grade secondary market opened to a "strong tone" on Wednesday, one trader said, as a number of issuers are set to hit the primary market later in the day.

However, the tone "faded off" as the morning wore on, with most bond spreads moving "back to unchanged."

The trader added that Hewlett-Packard Co. was seeing an active morning, with spreads 3 basis points wider on the day.

The company's 4.05% notes due 2022 were trading at 313 bps bid, 303 bps offered at midday.

The Palo Alto, Calif. computer, printing and imaging company sold the $500 million of notes on March 7, 2012 at a spread of 210 bps over Treasuries.

In recent deals, Volkswagen International Finance NV's issuance of fixed-rate notes was unchanged to slightly weaker on Wednesday.

The $850 million of 1.15% three-year notes, which sold with a spread of Treasuries plus 85 bps on Tuesday, was quoted at 85 bps bid, 82 bps offered at midday.

The $650 million tranche of 1.6% five-year notes traded 1 bp wider at 106 bps bid, 103 bps offered.

The notes priced with a spread of 105 bps over Treasuries.

The issuer is an Amsterdam-based financing arm of Wolfsburg, Germany-based auto-maker Volkswagen AG.

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