Morning Commentary: AT&T, Verizon notes improve in secondary market; high-grade spreads weak

By Cristal Cody

Tupelo, Miss., Aug. 17 – High-grade bonds in the telecommunications space remained better in secondary trading at the start of Monday’s session, according to market sources.

AT&T Inc.’s 3.4% notes due 2025 traded 2 basis points tighter early Monday.

Verizon Communications Inc.’s 3.5% notes due 2024 firmed about 1 bp.

The three-month Libor yield was unchanged at 32 bps on Monday.

The Markit CDX North American Investment Grade index was flat at a spread of 77 bps.

“Overall, spreads across all sectors excluding financials are trading at relatively wide levels,” according to a RBC Capital Markets, LLC note on Monday.

AT&T firms

AT&T’s 3.4% notes due 2025 were seen 2 bps tighter at 188 bps offered, a market source said.

The notes traded on Friday 1 bp better at 195 bps bid.

AT&T sold $5 billion of the notes (/BBB+/A-) on April 23 at a spread of Treasuries plus 150 bps.

The telecommunications company is based in Dallas.

Verizon improves

Verizon’s 3.5% notes due 2024 firmed about 1 bp from Friday to 172 bps offered, according to a market source.

The company sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22, 2014 at a spread of Treasuries plus 135 bps.

The telecommunications company is based in New York City.

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