Midday Commentary: Market quiet; Verizon long bonds ease, Ford paper flat in early trading

By Cristal Cody

Tupelo, Miss., Oct. 8 - The high-grade bond market opened relatively quiet on Tuesday with bonds mostly unchanged in the morning session, according to market sources.

"It's sort of just sitting there," one source said, noting the market was "maybe a little better, but not really. Today, there's not a whole heck of a lot going on."

The Markit CDX North American Investment Grade series 21 index widened 3 basis points on Monday to a spread of 82 bps. The index edged tighter early Tuesday, a source said.

In the secondary market, Verizon Communication Inc.'s long bonds eased about 1 bp.

Citigroup Inc.'s 6.675% subordinated notes due 2043 have traded better in the past month, while the rest of the financial services company's paper have not seen a "whole lot of movement," a source said.

In other trading, Ford Motor Credit Co. LLC's paper "looks unchanged" from Monday, a market source said.

Verizon active

Verizon Communication's bonds (Baa1/BBB+/A-) continue to trade actively since the record $49 billion bond deal priced on Sept. 11, traders said.

Verizon's 5.15% notes due 2023 were mostly unchanged at 159 bps bid, 157 bps offered Tuesday morning, one source said.

Verizon sold $11 billion of the 10-year notes with a spread of Treasuries plus 225 bps.

The tranche of 6.55% bonds due 2043 eased 1 bp since going out on Monday to 185 bps bid, 183 bps offered early Tuesday, according to a market source. The bonds were offered at 184 bps on Monday.

Verizon sold $15 billion of the 30-year bonds with a spread of Treasuries plus 265 bps.

The telecommunications company is based in New York City.

Ford unchanged

Ford Motor Credit's 2.875% notes due 2018 (Baa3/BBB-/) traded unchanged at 136 bps bid, 133 bps offered, according to a source early Tuesday.

The notes were offered at 133 bps on Monday.

Ford Motor Credit priced $1 billion of the five-year notes with a spread of Treasuries plus 145 bps on Sept. 26.

The company is the financing arm of Dearborn, Mich.-based automaker Ford Motor Co.

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