Morning Commentary: High-grade bond market reopens with little activity; no supply reported

By Cristal Cody

Tupelo, Miss., July 5 – Investment-grade bond market activity stayed on the quiet side at the start of Thursday’s session following the Independence Day holiday in the United States.

No deal supply was reported over the morning, though some issuance could pop up over the last two sessions of the week, sources report.

Investment-grade corporate issuers have stayed out of the market as July opened with zero new bond offerings reported week to date. Desks also are thinly staffed due to holiday vacations over the back half of the week.

Syndicate sources expected primary activity to range from nothing to up to $5 billion of volume for the week.

The three-month Libor yield was unchanged on Thursday at 2.34%, a market source said.

High-grade secondary trading volume week to date includes $7.34 billion of bonds traded in the short session on Tuesday and $11.59 billion of bonds traded on Monday, according to Trace. The markets were closed on Wednesday for the holiday.

In early secondary trading, Charter Communications, Inc.’s 4.5% senior secured notes due Feb. 1, 2024 (Ba1/BBB-/BBB-) were improved modestly, according to a market source on Thursday.

The notes were quoted at 100.38, up from 100.31 on Tuesday. The bonds traded as high as 101.38 a day after issuance.

Charter subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. sold $1.1 billion of the notes on June 28 at 99.893 to yield 4.521%, or a spread of Treasuries plus 180 basis points.

The broadband communications company is based in Stamford, Conn.

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