Morning Commentary: High-grade bond spreads steady; bank paper improves; telecoms mixed

By Cristal Cody

Tupelo, Miss., July 31 – Investment-grade bonds were mixed in midday trading with spreads unchanged to slightly weaker early Thursday, market sources said.

The Markit CDX North American Investment Grade series 22 index ended flat on Wednesday at a spread of 60 basis points, a source said.

Bank and financial paper was mostly stronger, according to a market source.

Morgan Stanley’s 2.375% senior notes due 2019 tightened about 6 bps.

Bonds in the telecommunications sector traded flat to about 2 bps wider, a market source said.

Verizon Communications Inc.’s 6.55% bonds due 2043 were unchanged in early trading.

Morgan Stanley firms

Morgan Stanley’s 2.375% notes due 2019 (Baa2/A-/A) were quoted about 6 bps tighter at 73 bps offered, according to a market source early Thursday.

Morgan Stanley sold $2.5 billion of the notes at a spread of Treasuries plus 85 bps on July 17.

The financial services company is based in New York City.

Verizon stable

Verizon’s 6.55% bonds due 2043 (Baa1/BBB+/A-) traded flat at 155 bps offered, a source said.

The bonds have tightened about 4 bps from Monday, according to a market source.

The company sold $15 billion of the bonds at Treasuries plus 265 bps on Sept. 11, 2013.

Verizon announced plans in July to exchange the bonds for a tranche of new notes due 2046.

The telecommunications company is based in New York City.

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