Midday Commentary: High-grade bond spreads unchanged; DirecTV gains; AT&T weakens

By Cristal Cody

Tupelo, Miss., June 3 - Investment-grade bond spreads remained little changed early Tuesday following more than $5 billion of issuance in the previous session and expectations for another heavy round of supply, according to market sources.

Companies including International Paper Co., Ford Motor Credit Co. LLC and Wells Fargo & Co. are expected to price notes on Tuesday.

In the secondary market, the Markit CDX North American Investment Grade series 22 index ended unchanged on Monday at a spread of 62 basis points.

Paper from DirecTV Holdings LLC was higher in midday trading, according to a market source.

The company's notes have been volatile but trading mostly better on AT&T Inc.'s plan to acquire the satellite TV provider in a cash and stock deal valued at about $48.5 billion, sources said.

AT&T's 3.9% notes due 2024 weakened in early trading, a source said.

DirecTV gains

DirecTV's 4.45% notes due 2024 (Baa2/BBB/) rose to 107.18 in trading over the morning from 106.08 on Monday, a market source said.

The notes climbed as high as 109.29 on Friday.

DirecTV Holdings and DirecTV Financing Co. priced $1.25 billion of the notes on March 17 at 99.63 to yield 4.496%.

The digital entertainment company is based in El Segundo, Calif.

AT&T weaker

AT&T's 3.9% notes due 2024 (A3/A-/A) traded lower at 103.11 on Tuesday, according to a market source.

The notes headed out on Monday at 103.85.

AT&T sold $1 billion of the 10-year notes on March 5 at 99.696 to yield 3.937%.

The telecommunications company is based in Dallas.

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