Corporate Bond Spreads

April 16th, 2014 10:19 am | by John Jansen |

Corporate bond spreads are unchanged to a basis point tighter this morning. Activity in the secondary is light.

Yesterday Walmart priced a 3 year and a 10 year and a 30 year. The pricing and subsequent trading in the secondary market is reflective of a market that is not pricing the event risk and credit risk embedded in a corporate bonds. I am not disparaging Walmart as the company is a stellar credit and shrewd to take advantage of investors search for yield.

The initial price talk on the 3 year tranche was 25. It priced at 17 and as we speak it is 15/12. The initial talk on the 10 year was 80 and it priced at 70 and is currently 63/61. The initial talk on the 30s was 100. It priced at 90 and is currently 83/81.

And so it goes.

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