Morning Commentary: Investment-grade bonds mostly soft; AT&T, Verizon long bonds widen

By Cristal Cody

Tupelo, Miss., June 16 – High-grade bonds remained weak over the morning after credit spreads widened on Monday, sources said.

The Markit CDX North American Investment Grade series 23 index eased 2 basis points to a spread of 70 bps on Monday.

The CDX IG index has ranged from a low of 59.4 bps to a high of 76.4 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

AT&T Inc.’s 4.75% bonds due 2046 were quoted 6 bps weaker in the secondary market.

Bonds from Verizon Communications Inc., underway with a $4.4 billion acquisition of AOL Inc., continued to trade wider.

AT&T eases

AT&T’s 4.75% bonds due 2046 traded 6 bps weaker early Tuesday at 221 bps offered, according to a market source.

AT&T sold $3.5 billion of the bonds (/BBB+/A-) on April 23 at Treasuries plus 215 bps.

The telecommunications company is based in Dallas.

Verizon soft

Verizon’s 6.55% bonds due 2043 widened 5 bps to 227 bps offered, a market source said.

Verizon sold $15 billion of the bonds (Baa1/BBB+/A-) on Sept. 11, 2013 at a spread of Treasuries plus 265 bps.

The telecommunications company is based in New York City.

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