Midday Commentary: Investment-grade bonds open softer; AT&T notes flat in early trade

By Cristal Cody

Tupelo, Miss., March 10 - Investment-grade bond spreads opened Monday slightly wider as the market continues to digest the flurry of supply from the previous week and prepares for another round of heavy issuance, according to informed sources.

More than $50 billion of new corporate bonds priced over the last week.

"Any time there is an inordinately large amount of supply that hits the corporate bond market it should come as a bit of a concern to investors as many of the previous weeks that saw broad-based heavy supply came prior to market dislocations," RBC Capital Markets, LLC analysts said in a morning note. "Usually issuers have a good feel for when it is an opportune time to tap the market and when companies are falling on top of each other to issue bonds it's usually time to lighten up."

The Markit CDX North American Investment Grade series 21 index closed flat on Friday at a spread of 63 basis points.

In early secondary trading on Monday, AT&T Inc.'s notes traded unchanged in front of a five-part notes offering expected to price later in the day from Verizon Communications Inc., a market source said.

AT&T flat

AT&T's 3.9% notes due 2024 were unchanged early Monday at 125 bps offered, according to a market source.

The company sold $1 billion of the 10-year notes (A3/A- /A) on Wednesday at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.