Morning Commentary: Deal action thins as market awaits Fed decision; Verizon, Penske improve

By Cristal Cody

Tupelo, Miss., March 15 – Deal action in the high-grade bond market is expected to stay light on Wednesday with market participants focused on the Federal Reserve’s release of its monetary policy decision later in the session.

A rate hike is widely expected.

In primary market activity, CA, Inc. announced plans on Wednesday to price an offering of senior notes.

In the secondary market, Verizon Communications Inc.’s 4.125% notes due March 16, 2027 traded slightly better as the session opened.

Penske Truck Leasing Co., LP’s new 4.2% senior notes due April 1, 2027 traded modestly better than issuance.

Secondary trading volume dropped to $14.85 billion on Tuesday from $16.9 billion on Monday, according to Trace.

The three-month Libor yield was up 1 basis point to 1.13% on Wednesday, a source said.

Verizon up

Verizon Communications’ 4.125% notes due March 16, 2027 traded up to 99.51 early Wednesday, a market source said.

The notes (Baa1/BBB+/A-) last traded on Tuesday at 99.41.

Verizon sold $3.25 billion of the 10-year notes on Monday at 99.256 and a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

Penske better

Penske Truck Leasing’s 4.2% senior notes due April 1, 2027 were quoted in secondary trading over the morning at 100.03, a source said.

Penske Truck Leasing and co-issuer PTL Finance Corp. priced $500 million of the 10-year senior notes (Baa2/BBB/BBB+) on Monday at 99.861 and a spread of 160 bps over Treasuries.

The global transportation services provider is based in Reading, Pa.

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