Morning Commentary: Investment-grade bonds mixed; AT&T tightens; Apple recovers

By Cristal Cody

Tupelo, Miss., Aug. 21 – High-grade corporate bonds were mixed in early trading on Thursday, while spreads opened the session modestly tighter, according to market sources.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 58 bps on Wednesday.

Traders were focused over the morning on economic data releases, including the Labor Department’s report that initial jobless claims for the week ended Aug. 16 dropped 14,000 to 298,000.

In the secondary market, AT&T Inc.’s 4.8% bonds due 2044 traded about 4 bps tighter from Monday’s levels, according to a market source.

Apple Inc.’s 3.45% notes due 2024 recovered some of the weakness from the previous week but remain softer, according to a market source.

AT&T firms

AT&T’s 4.8% notes due 2044 (A3/A-/A) tightened to 139 bps offered early Thursday from where the notes traded on Monday at 143 bps offered, according to a market source.

AT&T sold $2 billion of the 30-year notes at a spread of Treasuries plus 140 bps on June 3.

The telecommunications company is based in Dallas.

Apple improves

Apple’s 3.45% notes due 2024 (Aa1/AA+/) were quoted at 80 bps offered early Thursday, better than where the notes ended the previous week in the 86 bps area, according to a market source.

The company sold $2.5 billion of the notes at a spread of Treasuries plus 77 bps on April 29.

Apple is a computer and mobile communications device company based in Cupertino, Calif.

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