Midday Commentary: Investment-grade bonds 'range-bound' on FOMC wait; Verizon active

By Cristal Cody

Tupelo, Miss., Oct. 30 - Investment-grade bonds opened Wednesday mostly flat ahead of the Federal Open Market Committee rate decision expected later in the day, according to market sources.

"Most of it so far is unchanged," a trader said. "Everybody's kind of waiting to hear what the Fed says this afternoon. It's kind of range-bound for now."

The Markit CDX North American Investment Grade series 21 index closed 1 basis point tighter to a spread of 71 bps on Tuesday.

Verizon active

In the secondary market early Wednesday, Verizon Communication Inc.'s notes, which were sold in September, continue to trade actively, though the bonds are mostly unchanged on the week, according to market sources.

Verizon sold a record $49 billion in eight tranches of notes (Baa1/BBB+/A-) on Sept. 11.

The company's 5.15% notes due 2023 traded early Wednesday at 155 bps bid, 153 bps offered, a trader said.

Verizon sold $11 billion of the 10-year notes with a spread of Treasuries plus 225 bps.

The long-dated tranche of 6.55% bonds due 2043 sold in the deal traded in Wednesday morning's session at 178 bps bid, 176 bps offered, a trader said.

Verizon sold $15 billion of the 30-year bonds with a spread of Treasuries plus 265 bps.

The telecommunications company is based in New York City.

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