Corporate bonds began the day with a weak tone as they opened a couple of basis ponts wider. One former colleague and current afficionado of that market noted that this was only the second or third day in the last three weeks on which spreads opened wider. Spreads have since rebounded and are now unchanged to even marginally tighter.
The tone of the market has shifted 180 degrees from that which existed in mid March. Buyers abound now whereas a month ago sellers ruled the day.
The new issue market had an active issuance day today with Pearson and Bank America each coming to market. Pearson brought $350 million 5 years and $550 million 10 years. The initial talk was T+ 2 5/8 for each tranche but as evidence of the firm tone the talk has tightened to 245 for each issue.
Bank of America had a similar experience as it offers benchmark size in the 5 year and 10 year sector. The current talk is T+ 1 7/8 for the 5 year and T+190 for the 10 year. That represents about a 15 basis point concession to outstanding issues and manifests the distance the market has travelled . At the height of the debacle a new issue of similiar structure would have been issued 40 basis points to 50 basis points cheap to outstanding Bof A securities