Morning Commentary: Investment-grade credit spreads soften; bonds mixed; CBS, Amazon.com firm

By Cristal Cody

Tupelo, Miss., Jan. 9 – High-grade corporate bonds opened the session mixed as traders focused early Friday on the strong December jobs report, market sources said.

The Labor Department reported that total non-farm payroll employment rose by 252,000 in December, better than the 240,000 analysts forecast.

The unemployment rate fell to 5.6% from 5.8% in November.

The Markit CDX North American Investment Grade series 23 index, which firmed 2 basis points to a spread of 68 bps on Thursday, softened less than 1 bp over the morning, according to a market source.

In the secondary market, CBS Corp.’s senior notes (Baa2/BBB/BBB) that priced on Wednesday traded modestly tighter on Friday, a source said.

Amazon.com, Inc.’s 4.95% notes due 2044, which had softened since the start of the year, improved about 5 bps, according to a market source.

CBS improves

CBS’ 3.5% notes due 2025 were quoted 1 bp to 2 bps tighter at 156 bps offered early Friday, according to a market source.

CBS sold $600 million of the notes on Wednesday at Treasuries plus 160 bps.

The broadcasting company is based in New York.

Amazon.com tightens

Amazon.com’s 4.95% notes due 2044 (Baa1/AA-/) firmed about 5 bps to 199 bps offered, a market source said.

The bonds were quoted in the first session of the year on Jan. 2 at a spread of 193.4 bps.

Amazon.com sold $1.5 billion of the 4.95% notes due 2044 at Treasuries plus 205 bps on Dec. 2.

The online retailer is based in Seattle.

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