Berkshire and Transocean Issues Gain, Spreads Tighten

Includes: BRK.A, BRK.B, RIG
by: Bondsquawk, CFA

By Maulik Mody

Corporate bonds gained yesterday as the short index and the long index advanced 0.1% and 0.3% respectively. The short index, which tracks bonds maturing in less than 5 years from now, climbed to 1085.42, pushing average yield 4 bp lower to 2.47%. Spreads continued to narrow as it now stands at 1.67%, 2 bp tighter than last week’s close. (Click to enlarge)

The long index jumped to 1141.22, with average yield 3 b lower at 4.06%. The spread of the long iTB index, which is created to track twenty of the most liquid corporate bonds from various industries, widened a basis point to 1.64%.

The outperformer was Berkshire Hathway's (NYSE:BRK.A) 3.2% issue maturing in 2015. The bond advanced 78 cents to $105.34. The yield on the bond fell 18 bp to 1.93%, while spreads tightened 15 bp to 0.69%. The bond returned 0.75% on price basis in a day. Following a close second was Transocean’s (NYSE:RIG) 5.25% issue due in 2013. Its spread tightened 11 bp to 2.56% as it gained 28 cents in price.

Disclosure: None