Morning Commentary: Investment-grade bond market activity thin; UnitedHealth notes improve slightly

By Cristal Cody

Eureka Springs, Ark., Dec. 21 – Investment-grade primary action remains quiet with no activity expected over the rest of the holiday-shortened week.

The bond markets will close early on Friday and will be closed on Dec. 26 for the Christmas Day holiday.

While the primary market has come to a stop, secondary trading remains active.

On Tuesday, $13.44 billion of investment-grade issues were traded, up from $12.99 billion on Monday, according to Trace.

UnitedHealth Group Inc.’s notes (A3/A+/A-) that priced on Dec. 15 traded modestly better early Wednesday.

The three-month Libor yield fell 1 basis point to 99 bps on Wednesday after hitting 100 bps on Tuesday, according to a market source.

UnitedHealth improves

UnitedHealth Group’s 3.45% notes due 2027 rose to 100.49 on Wednesday from 100.48 the previous session, according to a market source.

The company sold $750 million of the 10-year notes on Dec. 15 at 99.896 to yield 3.462%, or 85 bps over Treasuries.

UnitedHealth’s 4.2% notes due 2047 were up to 99.89 in early trading from where the bonds last traded on Tuesday at 99.83.

The bonds were sold in a $750 million tranche in the Dec. 15 offering at 99.253 to yield 4.244%, or a spread of Treasuries plus 105 bps.

The diversified health company is based in Minnetonka, Minn.

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