Midday Commentary: Investment-grade bond spreads flat in light trading; telecom unchanged

By Cristal Cody

Tupelo, Miss., Oct. 1 - Investment-grade bonds traded flat early Tuesday following the U.S. government shutdown, market sources said.

"It's been pretty light," one trader said. "Spreads are basically unchanged - not much of a response so far."

In the secondary market, most issues were unchanged in the morning session, including Verizon Communication Inc.'s bonds, sources said.

AT&T Inc.'s bonds traded flat but tighter than where the issue traded in mid-September.

In line with the rest of the telecommunication, media and technology sector, Time Warner Cable Inc.'s bonds also traded flat.

"They're basically unchanged, too," a trader said.

The Markit CDX North American Investment Grade series 21 index eased 1 basis point on Monday to a spread of 82 bps. Investment-grade bond spreads closed September tighter by 2 bps on a month-over-month basis, a market source said.

Verizon bonds firm

In early trading on Tuesday, Verizon's 6.55% bonds due 2043 (Baa1/BBB+/A-) were flat at 193 bps bid, 190 bps offered, according to a trader.

Verizon sold $15 billion of the 30-year bonds with a spread of Treasuries plus 265 bps in the $49 billion eight-tranche offering that priced on Sept. 11.

The telecommunications company is based in New York City.

AT&T unchanged

In other telecom activity, AT&T's 4.3% bonds due 2042 (A3/A-/A) traded unchanged at 172 bps bid, 167 bps offered, a trader said.

The bonds were quoted at 190 bps the week of Sept. 11 when Verizon priced its record bond offering.

AT&T is a Dallas-based communications company.

Time Warner Cable flat

Time Warner Cable's 4.5% senior debentures due 2042 traded unchanged at 285 bps bid, 275 bps offered over the morning session, a trader said on Tuesday.

The debentures are unchanged from Friday.

Time Warner Cable priced $1.25 billion of the debentures in August 2012 at a spread of Treasuries plus 183 bps.

The broadband communications 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.