Morning Commentary: Investment-grade bonds mixed; Merck firms; Time Warner Cable mostly flat

By Cristal Cody

Tupelo, Miss., Feb. 12 – High-grade corporate bonds were mixed early Thursday after spreads leaked wider in Wednesday’s session, sources said.

Light primary action is expected over the day with a three-part offering on deck from Lockheed Martin Corp.

In the secondary market, Merck & Co., Inc.’s 3.7% notes due 2045 traded 2 basis points tighter.

Time Warner Cable Inc.’s 4.5% senior debentures due 2042 were flat to 1 bp softer.

The Markit CDX North American Investment Grade index eased 1 bp to a spread of 67 bps on Wednesday.

Merck improves

Merck’s 3.7% bonds due 2045 traded about 2 bps better at 119 bps offered, according to a market source.

Merck sold $2 billion of the bonds (A2/AA/) on Feb. 5 at a spread of Treasuries plus 130 bps.

The pharmaceutical and health care company is based in Whitehouse Station, N.J.

Time Warner Cable mostly flat

Time Warner Cable’s 4.5% senior debentures due 2042 (Baa2/BBB/BBB) traded flat to 1 bp weaker at 197 bps offered, a market source said.

Time Warner Cable sold $1.25 billion of the debentures on Aug. 7, 2012 at Treasuries plus 183 bps.

Comcast Corp. plans to acquire Time Warner Cable in a $45.2 billion all-stock deal.

The broadband communications company is based in New York City.

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