Morning Commentary: High-grade bonds flat to better in quiet trade; Verizon, Goldman firm

By Cristal Cody

Tupelo, Miss., Nov. 26 – Activity in the investment-grade bond market stayed mostly quiet early Wednesday as traders digested a heavy round of economic data and desks thinned in front of the Thanksgiving Day holiday, market sources said.

Among the reports, the Labor Department announced that initial unemployment claims for the previous week rose 21,000 to 313,0000, much higher than the 288,000 forecast.

High-grade credit spreads remained tight and bonds were mostly unchanged to modestly better in early trading, sources said.

Verizon Communications Inc.’s bonds improved 1 basis point to 2 bps from Monday, according to a market source.

Goldman Sachs Group Inc.’s 2.625% notes due 2019 that priced in January are stronger for the year so far, a source said.

The Markit CDX North American Investment Grade series 23 index tightened 1 bp to a spread of 61 bps on Tuesday.

Verizon active in secondary

Verizon’s 3.5% notes due 2024 (Baa1/BBB+/A-) traded 1 bp to 2 bps better at 131 bps offered, a market source said.

The notes rose modestly in early trading to 99.65 to yield 3.542% from 99.43 to yield 3.569% in the previous session, according to a source.

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

The telecommunications company is based in New York City.

Goldman paper holds tight

Goldman Sachs’ 2.625% notes due 2019 were quoted at 79 bps offered in the secondary market, according to a market source.

The notes traded mostly unchanged over the morning at 101.06 to yield 2.356%, a source said.

Goldman Sachs sold $2.5 billion of the five-year notes on Jan. 28 at 99.684 to yield 2.639%, or a spread of 112.5 bps over Treasuries.

The financial services company is based in New York City.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.