Morning Commentary: Investment-grade credit spreads stable; Verizon unchanged; BNP tightens

By Cristal Cody

Tupelo, Miss., Nov. 3 – High-grade credit spreads opened mostly unchanged after tightening on Friday, according to market sources.

The Markit CDX North American Investment Grade series 23 index ended 2 basis points tighter at a spread of 64 bps on Friday.

Secondary activity was fairly quiet early Monday in front of expected primary activity, market sources said.

Verizon Communications Inc.’s 3.5% senior notes due 2024 traded unchanged but about 2 bps weaker than where the notes priced in mid-October, according to a market source.

BNP Paribas SA’s 4.25% subordinated tier 2 notes due Oct. 15, 2024 were quoted more than 10 bps better than where the notes came in the previous month, according to a market source.

Verizon steady

Verizon’s 3.5% notes due 2024 (Baa1/BBB+/A-) were unchanged at 137 bps offered, a market source said.

The issue was quoted at 102.52 to yield 3.095% in early trading.

Verizon sold $2.5 billion of the notes on Oct. 22 at 99.34 to yield 3.579%, or a spread of Treasuries plus 135 bps.

The telecommunications company is based in New York City.

BNP tightens

BNP Paribas’ 4.25% subordinated tier 2 notes due Oct. 15, 2024 traded at 182 bps offered in light activity, a market source said.

The notes last traded on Friday at 100.77 to yield 4.155%, a source said.

BNP Paribas sold $1 billion of the notes (Baa2/BBB/A) at 99.116 to yield 4.36%, or a spread of Treasuries plus 195 bps, on Oct. 6.

The financial services company is based in Paris.

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