Morning Commentary: Investment-grade bonds mixed; GE Capital firms; telecom long bonds weak

By Cristal Cody

Tupelo, Miss., Jan. 7 – Traders prepared early Wednesday for new issuance with high-grade corporate deals scheduled to price later in the day from companies including CBS Corp., TransCanada Corp. and Ventas Realty, LP.

Tone was improved over the morning with the Markit CDX North American Investment Grade series 23 index better by about 1 basis point after closing on Tuesday 2 bps wider at a spread of 71 bps, a source said.

General Electric Capital Corp.’s existing 3.45% notes due 2024 remain active and firmed about 4 bps in secondary trading, according to a market source.

Long bonds in the telecommunications sector have widened 30 bps to 50 bps since December and continue to trade moderately weaker, a source said.

AT&T Inc.’s 4.35% bonds due 2045 traded 3 bps wider, while Verizon Communications Inc.’s 6.55% bonds due 2043 eased 2 bps.

GE Capital firms

GE Capital’s existing 3.45% notes due 2024 (A1/AA+/), quoted flat on Tuesday at 93 bps bid following the company’s $4.5 billion three-part offering of bonds, firmed to 89 bps offered, a market source said early Wednesday.

GE Capital sold $1 billion of the notes on May 12, 2014 at a spread of Treasuries plus 85 bps.

The financial products and services subsidiary of General Electric Co. is based in Norwalk, Conn.

AT&T flat

AT&T’s 4.35% notes due 2045 (A3/A-/A) traded 3 bps wider at 205 bps offered, according to a market source.

The bonds were quoted in mid-December at 154 bps offered.

AT&T sold $3 billion of the bonds in 2012.

The telecommunications company is based in Dallas.

Verizon eases

Verizon’s 6.55% bonds due 2043 (Baa1/BBB+/A-) eased 2 bps to 208 bps offered, a market source said.

The bonds were quoted in mid-December at 176 bps offered.

Verizon sold $15 billion of the bonds at Treasuries plus 265 bps on Sept. 11, 2013.

The telecommunications company is based in New York City.

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