Morning Commentary: Investment-grade bond spreads soft; Morgan Stanley, Verizon, AT&T firm

By Cristal Cody

Tupelo, Miss., July 21 – Investment-grade bond spreads opened modestly softer at the start of Monday’s trading session after improving on Friday, market sources said.

The Markit CDX North American Investment Grade series 22 index closed the previous session 1 basis point tighter at a spread of 59 bps.

Morgan Stanley’s 2.375% senior notes due 2019 brought on Thursday traded 5 bps tighter as bank and financial paper improved, according to a market source.

In the telecommunications sector, bonds from Verizon Communications Inc. and AT&T Inc. firmed, sources said.

Morgan Stanley narrows

Morgan Stanley’s 2.375% notes due 2019 (Baa2/A-/A) tightened about 5 bps to 81 bps offered, a source said.

Morgan Stanley sold $2.5 billion of the notes at Treasuries plus 85 bps on Thursday.

The financial services company is based in New York City.

Verizon firms

Verizon’s 6.55% bonds due 2043 (Baa1/BBB+/A-) were quoted early Monday at 161 bps offered, 3 bps tighter from Friday, a source said.

The notes edged up to 125.62 to yield 4.891% in early trading from 125.60 to yield 4.892%, 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.

AT&T better

AT&T’s 4.8% notes due 2044 (A3/A-/A) traded about 1 bp tighter at 136 bps offered, a market source said.

The notes fell to 102.11 to yield 4.667% over the morning from 102.48 to yield 4.644% on Friday, a source said.

AT&T sold $2 billion of the 30-year notes at a spread of Treasuries plus 140 bps, or 99.636 to yield 4.823%, on June 3.

The telecommunications company is based in Dallas.

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