Morning Commentary: Investment-grade primary market action quiets; telecom bonds active

By Cristal Cody

Tupelo, Miss., June 16 – High-grade bond market activity was quiet early Friday with no issuers reported in the deal pipeline.

Supply has been light over the week with one issuer tapping the primary market on Thursday.

Secondary market volume has been strong during the week with $17.77 billion of investment-grade bonds traded on Thursday, $16.62 billion on Wednesday, $18.02 billion on Tuesday and $13.21 billion on Monday, according to Trace.

In the secondary market early Friday, telecommunications bonds were active.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 gained more than 2 points from where the bonds went out on Thursday, a source said. The notes traded early Friday at 106.12 and traded last on Thursday at 104.11.

The New York City-based telecommunications company sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at 99.26 to yield 4.22% and a spread of Treasuries plus 160 basis points.

AT&T Inc.’s 4.5% notes due March 9, 2048 (Baa1/BBB+/A-) softened to 94.75 in early secondary trading from 94.95 on Thursday, according to a market source.

The Dallas-based telecommunications company sold $4.5 billion of the notes in a notes exchange on Sept. 2, 2016 at par to yield 4.5%.

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