Morning Commentary: Investment-grade spreads tight; telecom bonds active, mostly unchanged

By Cristal Cody

Tupelo, Miss., June 26 – Investment-grade credit spreads were mostly unchanged early Thursday and remain tight, according to market sources.

The Markit CDX North American Investment Grade series 22 index firmed 1 basis point to a spread of 56 bps on Wednesday.

Primary action has started to slow over the week, suggesting the “summer slowdown” has started,” RBC Capital Markets, LLC analysts said in a note.

Monsanto Co. is expected to bring a seven-tranche offering of senior notes, while Toronto-Dominion Bank plans a fixed- and floating-rate notes deal.

Bonds were mostly unchanged in early trading on Thursday, according to market sources.

Williams Partners LP’s 3.9% senior notes due 2025 were flat, a source said.

Telecommunications paper continues to be active but mostly range-bound in the secondary market, a source said.

AT&T Inc.’s 4.8% notes due 2044 traded flat to about 1 bp better, according to a market source.

Williams Partners notes flat

Williams Partners’ 3.9% notes due 2025 (Baa2/BBB/BBB) traded unchanged at 134 bps offered, according to a market source.

The company sold 750 million of the notes on Tuesday at Treasuries plus 135 bps.

Tulsa, Okla.-based Williams finds, produces, gathers, processes and transports natural gas.

AT&T steady

AT&T’s 4.8% notes due 2044 (A3/A-/A) traded about 1 bp tighter at 130 bps offered, a source said early Thursday.

AT&T sold $2 billion of the 30-year notes at Treasuries plus 140 bps on June 3.

The telecommunications company is based in Dallas.

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