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Morning Commentary: High-grade bond spreads stable; Apple firms, Verizon flat in early trade
By Cristal Cody
Tupelo, Miss., Aug. 12 – Investment-grade bonds continued to unwind some of the previous week’s weakness early Tuesday in front of expected supply from issuers including American Express Credit Corp., Motorola Solutions, Inc. and Aon plc, according to market sources.
Credit spreads remained tight over the morning after the Markit CDX North American Investment Grade series 22 index ended 2 basis points better at a spread of 63 bps on Monday, a source said.
In the secondary market, Apple Inc.’s 4.45% notes due 2044 traded about 3 bps tighter but are about 7 bps wider from where the notes priced in April, according to a market source.
Verizon Communications Inc.’s 5.15% notes due 2023 have widened more than 10 bps from July levels, a market source said.
Apple improves
Apple’s 4.45% notes due 2044 (Aa1/AA+/) firmed about 3 bps to 107 bps offered, according to a market source.
The bonds traded unchanged at 102.41 to yield 4.305% over the morning, a source said.
Apple sold $1 billion of the notes at a spread of Treasuries plus 100 bps, or 99.459 to yield 4.483%, on April 29.
The computer and mobile communications device company is based in Cupertino, Calif.
Verizon unchanged
Verizon’s 5.15% notes due 2023 (Baa1/BBB+/A-) traded unchanged in the 119 bps area, a market source said.
The notes have widened from 108 bps offered in mid-July, according to a market source.
The bonds edged lower to 111.78 to yield 3.616% over the morning from where the issue last traded at 111.83 to yield 3.611% on Monday, a source said.
Verizon sold $11 billion of the notes at Treasuries plus 225 bps, or 99.676 to yield 5.192%, on Sept. 11, 2013.
The telecommunications company is based in New York City.
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