Corporate Bonds

The corporate bond market had experienced a renaissance or revival of sorts over the last several weeks. The implosion in the CMBS market as well as the persistent weakness in the equity market has drained that sanguine attitude and substituted the melancholic mindset which had prevailed previously.Participants report that there is very little trading. Bid to offer spreads have widened and the little which does trade trades into the bid side.

Illustrative of the glum mood is the post pricing performance of the Verizon Wireless tranches which priced yesterday. The 5 year priced at T+ 5 3/8 which looked swell at the time. A few minutes ago the bond was 550/540. Similarly, the 10 year which priced at T+ 5 1/8 is now 530/515.

The IG 11 is currently 239 ½ 242 ½. That is all time wide territory for IG 11.

Originally published at Across the Curve and reproduced here with the author’s permission.