Morning Commentary: Investment-grade bonds flat to softer; Amazon.com, Verizon ease

By Cristal Cody

Tupelo, Miss., Dec. 10 – High-grade corporate bonds traded mostly unchanged to weaker early Wednesday ahead of expected issuance later in the session, market sources said.

The Markit CDX North American Investment Grade series 23 index ended unchanged at a spread of 65 basis points on Tuesday.

Amazon.com, Inc.’s 3.8% senior notes due 2024 that priced in the previous week eased 3 bps in secondary trading, according to a market source. The 10-year notes, though, continue to trade about 7 bps tighter than issuance, the source said.

Verizon Communications Inc.’s 6.55% bonds due 2043 have improved since Monday’s session but were weaker by about 4 bps on Wednesday, a market source said.

Amazon eases

Amazon.com’s 3.8% notes due 2024 notes (Baa1/AA-/) eased 3 bps to 148 bps offered, according to a market source.

The company sold $1.25 billion of the 10-year notes at Treasuries plus 155 bps on Dec. 2.

The online retailer is based in Seattle.

Verizon softer

Verizon’s 6.55% bonds due 2043 (Baa1/BBB+/A-) eased about 4 bps to 176 bps offered, according to a market source early Wednesday.

The bonds were quoted early Monday at 181 bps offered in the secondary market.

Verizon sold $15 billion of the bonds at a spread of Treasuries plus 265 bps on Sept. 11, 2013.

The telecommunications company is based in New York City.

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