Midday Commentary: Investment-grade market quiet; Verizon, AT&T paper active in light trade

By Cristal Cody

Tupelo, Miss., Jan. 3 - Trading is expected to stay light on Friday under winter storm conditions on the East Coast and with more than a few market participants out for holiday vacations until Monday, according to informed sources.

"It's been dead quiet, especially with the storm in New York," one trader said. "There's nothing going on today."

Bonds in the telecommunications sector rallied late in the year and remain actively traded in the investment-grade market so far in 2014, sources said.

Verizon Communications Inc.'s bonds (Baa1/BBB+/A-) are unchanged on the day but have tightened since before Christmas, a trader said.

AT&T Inc.'s long bonds have come in more than 30 basis points since November, market sources said.

Verizon stronger

Verizon's 5.15% notes due 2023 traded in the early session at 118 bps bid, 115 bps offered, according to a trader.

The notes were quoted on Dec. 23 at 129 bps bid, 125 bps offered.

Verizon sold $11 billion of the 10-year notes at Treasuries plus 225 bps on Sept. 11 as part of a record $49 billion eight-tranche debt offering.

The telecommunications company is based in New York City.

AT&T notes active

AT&T's 4.3% global notes due 2042 (A3/A-/A) traded early Friday unchanged from the previous day at 140 bps bid, 135 bps offered, a trader said.

The notes were quoted on Nov. 14 at 173 bps bid, 168 bps offered.

Also in the secondary market, AT&T's 2.625% notes due 2022 traded flat in the morning session at 97 bps bid, 92 bps offered, the trader said.

AT&T sold $1.5 billion of the 2.625% notes due 2022 on Dec. 6, 2012 with a spread of 105 bps.

The telecommunications company is based in Dallas.

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