Corporate Bonds

October 29th, 2008 3:39 pm | by John Jansen |

The corporate bond market has a better, if not firm, tone about it and dealers and investors transact pockets of business in a still wounded market. The IG 11 reflects that better tone as it is currently a couple better on the day at 108/210.The Amex 5 year which I regularly chronicle here is 825/775. It has at least for now stopped widening.

The GE 10 year is 465/440 which is about unchanged from yesterday on a slightly wider quote.

The Pepsico 10 year is probably about 15 basis points better and the issue reflects some of the improved tone. The issue was priced at a spread of 425 basis points to the 10 year and broke tighter. There was significant trading in the 380 to 360 level on that bond and it is now 345/335. So buying continues in a safe name at a wide spread.

One of the salesman with whom I speak also offered as anecdotal evidence of the improved tone via the Abbot 2016s. He had clients looking to trade those bonds a week ago at they traded to a 320 bid. The bond is 280 bid today.

The Federal Reserve and the Administration are in a race against time to stabilize the system. The objective is to reestablish confidence. I will begrudgingly admit that the first glacial progress has been made in that process and the improved performance of some of the credits I have discussed here is evidence of that improvement.

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