Morning Commentary: High-grade primary market quiet at start; thin holiday action eyed

By Cristal Cody

Tupelo, Miss., Nov. 23 – Investment-grade bond issuers stayed quiet at the start of Monday’s session with no reported offerings and light activity expected over the Thanksgiving Day holiday week.

Anywhere from zero to about $5 billion of issuance is forecast this week, with any volume likely front-loaded ahead of the holiday, according to syndicate sources.

The bond markets will close on Thursday and will close early at 2 p.m. ET on Friday.

Issuers headed out quietly on Friday after supply beat market expectations over the week with more than $40 billion of corporate deals and $13 billion of sovereign, supranational and agency issuance.

Looking to December, about $25 billion to $35 billion or more of new investment-grade corporate issuance is anticipated.

Market tone was mixed at the start of Monday’s session with equities mostly up on additional Covid-19 vaccine headway reports.

The Pimco Investment Grade Corporate Bond index was up 0.18% at $116.90.

The iShares iBoxx Investment Grade Corporate Bond ETF edged down 0.01% to $137.56.

High-grade bonds were mixed in early trading, a market source said.

In the secondary market, Verizon Communications Inc.’s $12 billion of senior notes (Baa1/BBB+/A-) that priced in five tranches on Nov. 10 remain active.

The company’s 2.875% notes due Nov. 20, 2050 were quoted trading early in the session at 104, better than where the issue was seen on Thursday over 103.50.

Verizon sold $2.75 billion of the notes on Nov. 10 at 99.74 to yield 2.89%.

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