Investment-grade market eyes $30 billion supply in week ahead; AT&T, Apple bonds tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 4 – High-grade bond activity was light to close the week on Friday, with players focused on the nonfarm payrolls report ahead of the extended Labor Day holiday weekend.

The Labor Department reported that 173,000 new jobs were created during August, fewer than the 217,000 expected.

Meantime, corporate investment-grade bond funds posted their sixth straight week of outflows.

For the week ended Sept. 2, high-grade funds saw $2.27 billion of outflows.

This figure follows last week’s outflows of $1.99 billion and shrinks the year-to-date total to roughly $21 billion of inflows.

Following back-to-back weeks that saw issuers stick to the sidelines, primary activity is expected to return in full force during the week ahead, with around $30 billion of supply predicted.

Investment-grade bonds headed out flat to tighter in light trading, while credit spreads leaked wider.

AT&T Inc.’s bonds (/BBB+/A-) tightened 3 basis points to 7 bps in the secondary market on Friday.

Apple Inc.’s bonds (Aa1/AA+/) firmed 1 bp to 7 bps over the day.

Intel Corp.’s senior notes (A1/A+/ A+) were mostly unchanged but remain stronger than issuance.

In other secondary trading, Hershey Co.’s 3.2% notes due 2025 firmed about 1 bp.

The Markit CDX North American Investment Grade index ended 1 bp wider on Friday at a spread of 83 bps.

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