Midday Commentary: Lack of paper boosts secondary; Google pulls back; Comcast notes firm

By Cristal Cody

Tupelo, Miss., Feb. 21 - Bonds tightened moderately in early trading in the investment-grade secondary market with the new issuance brought over the week mostly better, according to informed sources on Friday.

Though investment-grade corporate issuance is flat at nearly $150 billion compared to 2013, the "lack of paper is boosting the secondary market," according to a Barclays report on Friday. "While flows have been solid if not spectacular, demand is clearly outpacing supply. Investment-grade spreads continued to trade in a narrow range again this week."

Google Inc.'s 3.375% senior notes 2024 traded about ½ basis point better than issuance after the issue bounced around in aftermarket trading on Thursday, according to market sources.

Comcast Corp.'s senior notes (A3/A-/A-) tightened from where the issue priced on Wednesday, a source said.

Comcast announced a week ago that it will acquire Time Warner Cable Inc. in a $45.2 billion all-stock deal.

The Markit CDX North American Investment Grade series 21 index ended Thursday 1 bp tighter at a spread of 65 bps.

Google eases

Google's 3.375% notes 2024 (Aa2/AA/) were quoted at 62 bps bid early Friday in the secondary market, according to a market source.

Google sold $1 billion of the notes with a spread of Treasuries plus 62.5 bps on Thursday.

The notes traded after pricing at 64 bps bid, 63 bps offered and later at 61 bps bid, 69 bps offered, according to traders.

Google is a technology company based in Mountain View, Calif.

Comcast firms

Comcast's 3.6% notes due 2024 firmed to 86 bps bid, better than where the notes traded at 92 bps bid after pricing, according to a market source.

Comcast sold $1.2 billion of the notes at a spread of Treasuries plus 93 bps as part of a $2.2 billion two-part offering on Wednesday.

The media, technology and entertainment company is based in Philadelphia.

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