Investment-grade bond market action thins; light volume likely; AT&T firms; Time Warner flat

By Cristal Cody

Eureka Springs, Ark., Nov. 8 – Investment-grade bond issuers stayed on the sidelines on Tuesday with market participants focused on the U.S. elections.

“There’s no issuance today with the election,” one source said. “The number for the week will be lower than usual because of the short week and the election.”

The bond markets will be closed on Friday for the Veterans Day holiday.

Fannie Mae announced that it will not utilize its Benchmark Notes announcement date that was scheduled on Tuesday.

Market sources forecasted about $5 billion to $10 billion of volume for the week. On Monday, about $1 billion of investment-grade bonds priced from three issuers.

Whether issuance resumes on Wednesday “probably depends on what happens tonight,” a source said of the U.S. presidential election results.

The Markit CDX North American Investment Grade index improved 1 basis point to end at a spread of 76 bps.

AT&T Inc.’s bonds traded mostly tighter on Tuesday with the 4.125% notes due 2026 coming in 7 bps to narrow some of the weakness since the company announced in October plans to acquire Time Warner Inc.

Time Warner’s bonds were mostly flat in the secondary market.

Earlier, Deutsche Bank AG’s 4.25% notes due 2021 firmed about 1 bp, while JPMorgan Chase & Co.’s 2.95% senior notes due 2026 traded about 1 bp softer.

Fannie Mae skips issuance

Fannie Mae announced that it will not utilize its Benchmark Notes announcement date that was scheduled for Tuesday, according to a news release.

The company said it may forgo any scheduled Benchmark Notes issuance.

Fannie Mae is a mortgage credit provider based in Washington, D.C.

AT&T tightens

AT&T’s 4.125% notes due 2026 headed out on Tuesday 7 bps tighter at 161 bps bid, according to a market source.

The notes were quoted on Oct. 21 before the company announced plans to buy Time Warner at 146 bps bid.

The company placed a $900 million add-on to the bonds on May 3 at Treasuries plus 150 bps.

The notes originally were sold on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.

AT&T is a Dallas-based telecommunications company.

Time Warner stable

Time Warner’s 2.95% notes due 2026 were mostly unchanged at 136 bps bid, a market source said.

The 10-year notes traded at the 112 bps bid area before the merger deal with AT&T was announced.

Time Warner sold $800 million of the notes on May 5 at a spread of 135 bps over Treasuries.

The media and entertainment company is based in New York.

Deutsche Bank modestly firms

Deutsche Bank’s 4.25% notes due 2021 traded about 1 bp tighter at 291 bps offered, according to a market source early on Tuesday.

The bank priced a $1.5 billion add-on to the notes on Oct. 11 at a spread of Treasuries plus 290 bps. The notes were originally sold in a $3 billion tranche on Oct. 7 at Treasuries plus 300 bps.

Deutsche Bank is a banking and financial services company based in Frankfurt.

JPMorgan eases

JPMorgan’s 2.95% notes due 2026 were seen about 1 bp softer earlier on Tuesday at 123 bps offered, according to a market source.

JPMorgan sold $3 billion of the notes (A3/A-A+) on July 14 at a spread of 145 bps over Treasuries.

The financial services company is based in New York City.

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