Midday Commentary: Investment-grade bonds tighten at start of week; Verizon paper mixed

By Cristal Cody

Tupelo, Miss., Jan. 27 - Investment-grade bond spreads tightened early Monday in front of a busy week that includes a round of corporate earnings reports and the Federal Reserve's rate decision, market sources said.

Bonds widened on Friday with new issues wider in the secondary market. The Markit CDX North American Investment Grade series 21 index eased 5 basis points to a spread of 73 bps on Friday.

The Federal Open Market Committee meets for a two-day policy meeting that ends on Wednesday with the expected policy rate announcement.

In the high-grade secondary market on Monday, Verizon Communications Inc.'s bonds (Baa1/BBB+/A-) were mixed in trading, according to market sources.

Verizon mixed

Verizon's 6.55% bonds due 2043 climbed to 119.47 early Monday from 118.00 a week ago, a source said.

Verizon sold $15 billion of the 30-year bonds at 99.883 to yield 6.559% on Sept. 11.

The company's tranche of 5.15% notes due 2023 traded lower over the morning at 108.19, down from 109.33 at the start of the previous week, the source said.

Verizon sold $11 billion of the 5.15% notes due 2023 at 99.676 to yield 5.192% as part of the $49 billion eight-part offering brought in September.

The telecommunications company is based in New York City.

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