Midday Commentary: High-grade bond spreads tighten in early trade; Verizon improves

By Cristal Cody

Tupelo, Miss., Dec. 13 - Investment-grade bond spreads tightened early Friday and recovered most of the weakness seen over the week, according to a market source.

The Markit CDX North American Investment Grade series 21 index closed unchanged on Thursday at a spread of 70 basis points after widening 2 bps in the previous session.

High-grade bond spreads are almost 20 bps tighter on the year, according to a Barclays note on Friday.

In the secondary market, "triple BBBs, financials, and older bonds outperformed" over the year, the Barclays analysts said.

Verizon Communications Inc.'s 5.15% notes due 2023 (Baa1/BBB+/A-) traded slightly higher to the 106, 107 area early Friday, a source said.

Verizon sold $11 billion of the 10-year notes at 99.676 to yield 5.192% on Sept. 11 as part of its record $49 billion eight-part bond offering.

The telecommunications company is based in New York City.

Bonds in the technology, media and telecommunications sector, including issues from Verizon, AT&T Inc. and Time Warner Cable Inc., were among the most active investment-grade bonds over the week, a market source said.

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