Midday Commentary: Investment-grade spreads stable; Verizon better in early trading action

By Cristal Cody

Tupelo, Miss., Dec. 17 - Investment-grade credit spreads traded mostly unchanged at the start of Tuesday's session with bonds in the technology, media and telecommunications sector among the most-actively traded, according to market sources.

The Markit CDX North American Investment Grade series 21 index firmed 1 basis point on Monday to close at a spread of 69 bps.

Activity remained fairly light as market participants wait for the outcome of the Federal Reserve's two-day policy meeting that ends on Wednesday, sources said. The Federal Reserve may announce that it will start to slow its quantitative easing stimulus program.

"Credit spreads remain stable ahead of Wednesday's FOMC announcement," RBC Capital Markets, LLC analysts said in a note on Tuesday.

In the secondary market, Verizon Communication Inc.'s bonds have tightened along with other technology, media and telecommunications bonds since Thursday, a source said.

Verizon better

Verizon's 6.55% bonds due 2043 firmed to 158 bps bid in secondary trading early Tuesday, according to a source.

In October, the issue traded at 178 bps bid.

Verizon sold $15 billion of the 30-year bonds with a spread of Treasuries plus 265 bps as part of its $49 billion eight-tranche offering of notes (Baa1/BBB+/A-) brought on Sept. 11.

The telecommunications company is based in New York City.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.