Morning Commentary: High-grade bond spreads stable; Oracle, Verizon softer in early trade

By Cristal Cody

Tupelo, Miss., July 9 – Investment-grade primary action is expected later in the session from companies including American International Group, Inc., Bank of Montreal and Alexandria Real Estate Equities, Inc., though issuance is expected to be mostly light over the week, according to market sources on Wednesday.

“With a number of companies now in earnings related blackout, issuance will likely remain somewhat subdued this week,” RBC Capital Markets, LLC analysts said in a note.

Heavier primary activity is expected after U.S. financial companies report earnings in the next 1˝ weeks, the analysts said.

Bonds were flat to softer in early trading, a market source said.

The Markit CDX North American Investment Grade series 22 index ended Tuesday 2 basis points wider at a spread of 58 bps.

Oracle Corp.’s 3.4% notes due 2024 priced in the previous week traded about 2 bps weaker, a market source said.

Verizon Communications Inc.’s bonds remain active but slightly softer in secondary trading, according to a market source.

Oracle eases

Oracle’s 3.4% notes due 2024 (A1/A+/A+) eased 2 bps to 84 bps offered, a source said early Wednesday.

The notes climbed to 102.51 in morning trading from 100.83 on Tuesday, according to a market source.

Oracle sold $2 billion of the 10-year notes at 90 bps over Treasuries on June 30. The notes priced at 99.773 to yield 3.427%.

The computer software and technology company is based in Redwood City, Calif.

Verizon softer

Verizon’s 5.15% notes due 2023 (Baa1/BBB+/A-) traded 2 bps wider at 108 bps offered, according to a market source.

The issue edged lower to 111.70 from where the notes ended at 111.74 on Tuesday, a source said.

Verizon sold $11 billion of the notes at a spread of Treasuries plus 225 bps, or 99.676 to yield 5.192%, on Sept. 11, 2013.

The telecommunications company is based in New York City.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.