Midday Commentary: High-grade spreads flat; Bank of America tight; Verizon better on week

By Cristal Cody

Tupelo, Miss., April 4 - Investment-grade bond spreads were little changed early Friday with spreads tight but at the bottom of the recent range as traders focused on the March jobs report, according to market sources.

The Markit CDX North American Investment Grade series 22 index ended unchanged on Thursday at a spread of 67 basis points.

The Labor Department reported total non-farm payroll employment rose by 192,000 in March, near the 200,000 forecasted. The unemployment rate was flat at 6.7%.

The jobs data likely will keep primary activity quiet over the day, according to market sources.

"Next week could be a busy week of issuance if issuers look to get ahead of the Easter lull," RBC Capital Markets, LLC analysts said in a note.

Bank of America Corp.'s 4% senior notes due 2024 that priced the previous week remained stronger in secondary trading early Friday, a source said.

Verizon Communications Inc.'s 6.55% bonds due 2043 traded better over the week with the telecommunications company's paper among the most active issues in the investment-grade market, a source said.

Bank of America stronger

Bank of America's 4% notes due 2024 (Baa2/A-/A) traded early Friday at 118 bps offered, according to a market source.

The notes were quoted going out on Thursday at 122 bps bid.

Bank of America sold $2.75 billion of the notes on March 27 at 137 bps over Treasuries.

The financial services company is based in Charlotte, N.C.

Verizon better

Verizon's 6.55% bonds due 2043 were quoted over the morning at 151 bps offered, compared to 163 bps offered a week ago, according to a market source.

Verizon sold $15 billion of the bonds (Baa1/BBB+/A-) at Treasuries plus 265 bps in a $49 billion eight-part offering on Sept. 11, 2013.

The telecommunications company is based in New York City.

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