Morning Commentary: High-grade primary market quiet; AT&T bonds trade; Time Warner flat

By Cristal Cody

Tupelo, Miss., Sept. 22 – The high-grade bond market opened on Friday with no reported issuers marketing deals.

In secondary trading activity, AT&T Inc.’s bonds (Baa1/BBB+/A-) continued to trade heavily.

The company plans to acquire Time Warner Inc. (Baa2/BBB/BBB+) in an $85.4 billion cash and stock deal expected to close before the end of the year.

AT&T’s 3.9% notes due Aug. 14, 2027 traded up to 102.29 over the morning, a source said. The notes went out on Thursday at 100.19.

AT&T sold $5 billion of the notes on July 27 at 99.827 to yield 3.92% and a spread of 160 basis points over Treasuries.

Time Warner’s 2.95% notes due July 15, 2026 were unchanged early Friday at 96.35, according to a market source.

The New York-based media and entertainment company sold $800 million of the notes on May 5, 2016 at 98.70 to yield 3.1%, or a spread of Treasuries plus 135 bps.

Secondary trading volume dropped to $17.47 billon on Thursday from $18.83 billion on Wednesday, according to Trace.

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