High-grade bond markets mostly quiet; Duke Energy volatile; Citi, MUFG firm; AT&T eases

By Cristal Cody

Tupelo, Miss., April 13 – Action in the high-grade bond markets slowed on Thursday with many out for the long holiday weekend.

The bond markets closed at 2 p.m. ET and will be closed for the full day on Friday for the Good Friday holiday.

The Markit CDX North American Investment Grade index was mostly unchanged at a spread of 68 basis points.

Bonds were mixed in secondary trading over the short trading session.

Duke Energy Ohio, Inc.’s 3.7% first mortgage bonds due June 15, 2046 have been volatile over the last two days. The bonds softened on Wednesday before recovering losses and tightened 13 bps on Thursday.

UnitedHealth Group Inc.’s senior notes (A3/A+/A) were unchanged on the day.

AT&T Inc.’s 4.25% notes due March 1, 2027 eased about 3 bps.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 tightened about 1 bp on Thursday.

Bank and financial paper traded mostly better.

Citigroup, Inc.’s 4.75% subordinated notes due May 18, 2046 firmed about 3 bps during the session.

Mitsubishi UFJ Financial Group, Inc.’s 3.677% senior notes due Feb. 22, 2027 improved about 2 bps.

Duke Energy Ohio tightens

Duke Energy Ohio’s 3.7% first mortgage bonds due June 15, 2046 tightened about 13 bps on Thursday to 97 bps bid after widening 6 bps to 110 bps bid on Wednesday, a market source said.

The bonds (A2/A/) priced on March 22 in a $100 million add-on at a spread of 107 bps over Treasuries.

The company originally sold $250 million of the bonds at 125 bps over Treasuries on June 20, 2016.

The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a wholly owned subsidiary of Duke Energy Corp.

UnitedHealth stable

UnitedHealth Group’s 3.375% notes due April 15, 2027 were unchanged on Thursday at 87 bps bid, a market source said.

The company sold $625 million of the 10-year notes on March 8 at a spread of 87.5 bps over Treasuries.

UnitedHealth Group’s 4.25% notes due April 15, 2047 headed out flat at 110 bps bid.

UnitedHealth Group priced $725 million of the notes in the March 8 offering at a Treasuries plus 110 bps spread.

The diversified health company is based in Minnetonka, Minn.

AT&T weakens

AT&T’s 4.25% notes due March 1, 2027 softened about 3 bps on Thursday to 172 bps bid, according to a market source.

The company priced $2 billion of the notes (Baa1/BBB+/A-) on Jan. 31 at a spread of Treasuries plus 180 bps.

AT&T is a Dallas-based telecommunications company.

Verizon better

Verizon Communications’ 4.125% notes due March 16, 2027 firmed about 1 bp from the previous day to 154 bps bid, a source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

Citigroup gains

Citigroup’s 4.75% subordinated notes due May 18, 2046 (Baa3/BBB/A-) tightened about 3 bps to 182 bps bid on Thursday, according to a market source.

The notes were priced on Feb. 7 in a $750 million add-on at a spread of 173 bps over Treasuries.

Citigroup originally sold $1 billion of the notes on May 11, 2016 at a spread of Treasuries plus 225 bps.

The financial services company is based in New York.

MUFG firms

MUFG’s 3.677% notes due Feb. 22, 2027 headed out at 107 bps bid, about 2 bps better from the previous day, a market source said.

The $1 billion tranche of 10-year notes (A1/A/A) priced on Feb. 15 at a Treasuries plus 118 bps spread.

The bank is based in Tokyo.

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