Morning Commentary: Verizon notes mixed; credit spreads soften at opening; Libor yield climbs

By Cristal Cody

Eureka Springs, Ark., July 29 – Investment-grade bonds were mixed in secondary trading on Friday, while credit spreads opened the session weaker.

Verizon Communications Inc.’s $6.15 billion of senior notes (Baa1//A-) that priced in five tranches on Wednesday traded mostly wrapped around issuance to 3 basis points tighter in the secondary market, a source said.

The Markit CDX North American Investment Grade index opened 1 bp softer at a spread of 75 bps.

The three-month Libor yield rose 1 bp to 75 bps on Friday.

On Thursday, $14.54 billion of investment-grade issues were traded, compared to $17.61 billion on Wednesday, $16.84 billion on Tuesday and $14.69 billion on Monday, according to Trace.

Verizon mixed

Verizon’s 2.625% notes due 2026 were unchanged from issuance in secondary trading, according to a market source on Friday.

Verizon sold $2.25 billion of the 10-year notes on Wednesday at Treasuries plus 115 bps.

The company’s 4.125% notes due 2046 were quoted about 1 bp tighter early Friday at 187 bps offered.

Verizon sold $1.5 billion of the bonds in Wednesday’s sale at 190 bps over Treasuries.

The telecommunications company is based in New York City.

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