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Morning Commentary: Investment-grade market quiet; Verizon long bonds firm; Apple mostly flat
By Cristal Cody
Tupelo, Miss., June 27 – Investment-grade activity was mostly quiet early Friday after spreads widened and the market absorbed more than $6 billion of issuance in the previous session, including a $4.5 billion seven-part deal from Monsanto Co., sources said.
The Markit CDX North American Investment Grade series 22 index closed on Thursday 1 basis point wider at a spread of 57 bps.
In the secondary market, telecom paper continues to be actively traded, according to a market source early Friday.
Verizon Communications Inc.’s bonds (Baa1/BBB+/A-) traded better on the long end, a source said.
Apple Inc.’s 3.45% notes due 2024 have been active over the week and traded on Friday flat to about 1 bp weaker, according to a market source.
Verizon mixed
Verizon’s 5.15% notes due 2023 traded about 4 bps wider from Wednesday at 106 bps offered, according to a market source.
The notes were up a nickel in early trading at 112.20, a source said.
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 tightened 2 bps over the past two sessions to 149 bps offered early Friday, a source said.
The bonds slipped to 126.38 over the morning from 126.64 on Thursday, according to a market source.
Verizon sold $15 billion of the bonds at Treasuries plus 265 bps, or 99.883 to yield 6.559%, on Sept. 11, 2013.
The telecommunications company is based in New York City.
Apple steady
Apple’s 3.45% notes due 2024 (Aa1/AA+/) were mostly unchanged to 1 bp weaker at 75 bps offered, a source said.
The notes rose to 101.82 in early trading from 101.40 on Thursday, according to a market source.
Apple sold $2.5 billion of the 10-year notes at Treasuries plus 77 bps, or 99.916 to yield 3.46%, on April 29.
The computer and mobile communications device company is based in Cupertino, Calif.
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