Morning Commentary: Investment-grade pricing action forecast; Verizon better; Humana weakens

By Cristal Cody

Tupelo, Miss., March 20 – About $20 billion to $25 billion of investment-grade bond volume is forecast for the week, according to market sources on Monday.

No reported issuers were in the deal pipeline early Monday but primary action is expected over the session, a market source said.

Three-month Libor was unchanged at 1.15% at the start of the day, a source said.

In the secondary market, Verizon Communications Inc.’s 4.125% notes due March 16, 2027 that were priced a week ago traded better over the morning.

Humana Inc.’s 3.95% senior notes due 2027 priced in the previous week traded slightly weaker on Monday but remained better than issuance.

On Friday, $15.22 billon of high-grade issues were traded, according to Trace.

Verizon stronger

Verizon Communications’ 4.125% notes due March 16, 2027 traded as high as 102.59 early Monday after ending Friday at 100.86 in the secondary market, a source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at 99.256 and a spread of Treasuries plus 160 basis points.

The telecommunications company is based in New York City.

Humana softens

Humana’s 3.95% senior notes due 2027 softened to 101.49 in secondary trading on Monday from 101.54 on Friday, a market source said.

Humana sold $600 million of the 10-year notes (Baa3/BB+/BBB) on March 13 at 99.877 to yield 3.965% and a spread of Treasuries plus 135 bps.

The health care and insurance company is based in Louisville, Ky.

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