Morning Commentary: Investment-grade spreads soft; AT&T, Valmont ease in early trading

By Cristal Cody

Tupelo, Miss., Sept. 9 – High-grade credit spreads remained soft early Tuesday following about $8 billion of additional high-grade issuance in Monday’s session, according to market sources.

The Markit CDX North American Investment Grade series 22 index ended 1 basis point wider at a spread of 57 bps on Monday.

Coming up later in the day, primary action is expected from companies that include Dow Chemical Co., Verizon Communications Inc., Air Lease Corp., Hospitality Properties Trust and Buckeye Partners, LP.

Telecom bonds were active but softer in secondary trading ahead of Verizon’s planned 30-year notes offering, a source said.

AT&T Inc.’s 4.8% notes due 2044 traded 2 bps weaker, according to a market source.

In other secondary activity, Valmont Industries Inc.’s 5% senior notes due 2044 brought on Monday traded 3 bps wider over the morning, a source said.

AT&T softens

AT&T’s 4.8% notes due 2044 (A3/A-/A) eased 2 bps to 145 bps offered, according to a market source.

AT&T sold $2 billion of the 30-year notes at a spread of Treasuries plus 140 bps on June 3.

The telecommunications company is based in Dallas.

Valmont eases

Valmont Industries’ 5% notes due 2044 (Baa2/BBB+/) were quoted wider early Tuesday at 181 bps offered, according to a market source.

The notes headed out in secondary trading on Monday at 179 bps bid, 178 bps offered.

Valmont sold $250 million of the 30-year notes at Treasuries plus 180 bps on Monday.

The Omaha-based company produces and sells fabricated metal products.

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