Midday Commentary: Verizon widens on Vodafone talks; Viacom better in trading

By Cristal Cody

Tupelo, Miss., Aug. 29 - Verizon Communications Inc.'s bonds widened more than 10 basis points in secondary trading early Thursday on reports the broadband and telecom company is in talks again to purchase Vodafone Group plc's 45% stake in Verizon Wireless.

New York City-based Verizon owns 55% of the shares of Verizon Wireless.

"Verizon bonds [are] about 15 bps wider on the Vodafone deal," a trader said.

Bonds in the cable and telecom sector were active in trading on Wednesday and early Thursday, according to market sources.

Viacom firms

Viacom Inc.'s bonds have tightened since the New York City-based media entertainment company priced the issue on Aug. 12, a trader said.

Viacom's 5.85% bonds due 2043 were offered in the morning session at 200 bps.

Viacom sold $1.25 billion of the 30-year bonds at a spread of Treasuries plus 220 bps.

Credit tightens

Investment-grade bond spreads were mostly better early Thursday, sources said.

"Credit spreads are moving tighter this morning as for a fourth straight day the traditional offsetting relationship between corporate bond spreads and Treasuries has reasserted itself," RBC Capital Markets, LLC analysts said in a note.

The Markit CDX Series 20 North American Investment Grade index ended Wednesday 1 bp tighter at a spread of 83 bps.

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