Morning Commentary: High-grade spreads remain firm; DirecTV, Amazon.com steady; AT&T soft

By Cristal Cody

Tupelo, Miss., Dec. 4 – High-grade credit spreads remained tight early Thursday, while new issues were mostly stable in secondary trading, market sources said.

The Markit CDX North American Investment Grade series 23 index closed 1 basis point tighter to a spread of 61 bps on Wednesday.

The new 3.95% senior notes due 2024 that DirecTV Holdings LLC and DirecTV Financing Co. priced on Tuesday traded flat to 1 bp softer, a source said.

Amazon.com, Inc.’s senior notes brought on Tuesday were mostly unchanged, according to a market source.

In other trading, AT&T Inc.’s 3.9% notes due 2024 eased 3 bps, a source said.

DirecTV stable

DirecTV’s 3.95% notes due 2025 (Baa2/BBB/BBB-) traded mostly unchanged to 1 bp softer at 164 bps offered, a market source said early Thursday.

DirecTV Holdings and DirecTV Financing sold $1.2 billion of the 10-year notes on Tuesday at a spread of Treasuries plus 175 bps.

The digital entertainment company is based in El Segundo, Calif.

Amazon steady

Amazon.com’s notes (Baa1/AA-/) that priced on Tuesday were quoted mostly unchanged in early trading on Thursday, according to a market source.

The company’s 3.8% notes due 2024 traded flat at 153 bps offered.

Amazon.com sold $1.25 billion of the 10-year notes at Treasuries plus 155 bps.

The company’s tranche of 4.8% bonds due 2034 tightened about 1 bp to 179 bps offered, the source said.

Amazon.com sold $1.25 billion of the 20-year notes at 185 bps over Treasuries.

The online retailer is based in Seattle.

AT&T softens

AT&T’s 3.9% notes due 2024 (A3/A-/A) were quoted 3 bps wider at 136 bps bid in early trading, according to a market source.

AT&T sold $1 billion of the notes on March 5, 2014 at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

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