Morning Commentary: High-grade spreads mostly stable; Verizon mixed; bank paper eases

By Cristal Cody

Tupelo, Miss., June 25 – Investment-grade credit spreads stayed mostly stable over the morning on Wednesday after spreads weakened in the previous session, according to market sources.

The Markit CDX North American Investment Grade series 22 index eased 1 basis point to a spread of 57 bps on Tuesday. The index hit a 52-week low on Monday.

Bonds were unchanged to slightly wider in early trading, according to market sources.

Verizon Communications Inc.’s bonds (Baa1/BBB+/A-), among the most active investment-grade paper in the past week, were mixed, according to a market source.

Bank and financial paper traded on average 1 bp to 3 bps weaker, a source said.

Goldman Sachs Group Inc.’s 4% senior notes due 2024 eased 3 bps from the previous session.

Verizon mixed

Verizon’s 5.15% notes due 2023 traded 3 bps tighter from Tuesday at 102 bps offered early Wednesday, a source said.

The notes rose to 112.38 in trading Wednesday morning from 112.09 on Tuesday, according to a market source.

Verizon sold $11 billion of the notes at a spread of Treasuries plus 225 bps, or 99.676 to yield 5.192%, on Sept. 11, 2013.

The company’s 6.55% bonds due 2043 traded unchanged to 1 bp wider at 151 bps offered, a source said.

The notes were up at 126.21 early Wednesday from where the paper ended at 125.61 on Tuesday, according to a market source.

Verizon sold $15 billion of the bonds at Treasuries plus 265 bps, or 99.883 to yield 6.559%, in the September deal.

The telecommunications company is based in New York City.

Goldman eases

Goldman Sachs’ 4% notes due 2024 (Baa1/A-/A) were quoted about 3 bps wider at 116 bps offered on Wednesday, a source said.

The notes edged up to 102.41 from 102.11 on Tuesday, according to a market source.

Goldman sold $3 billion of the 10-year notes on Feb. 26 at 99.698 to yield 4.037%, or 137.5 bps over Treasuries.

The financial services company is based in New York City.

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