Morning Commentary: High-grade bond market quiets; Banco Santander to wrap roadshow; AT&T active

By Cristal Cody

Tupelo, Miss., Oct. 13 – The investment-grade bond market stayed mostly quiet on Friday morning with light action expected over the day.

Banco Santander, SA is expected to wrap its three-day roadshow on Friday for a Rule 144A and Regulation S dollar-denominated offering of senior notes (A3/BBB+/A-), according to a market source.

The deal is being arranged by Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Santander Investment Securities Inc.

Elsewhere, secondary market volume totaled $17.1 billion on Thursday, compared to $17 billion on Wednesday and $13.8 billion on Tuesday, according to Trace.

AT&T Inc.’s bonds (Baa1/BBB+/A-) have been heavily traded over the past month and remained fairly active in the secondary market early Friday, a source said.

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 were last seen at 101.88, up from where the bonds went out on Thursday at 101.40.

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 last seen in secondary trading on Thursday at 97.70, according to the 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.

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