Morning Commentary: Investment-grade bond spreads improve; AT&T, Bank of America edge tighter

By Cristal Cody

Tupelo, Miss., Aug. 18 – Investment-grade bonds firmed modestly early Monday after credit spreads eased 1 basis point on Friday, according to a market source.

The Markit CDX North American Investment Grade series 22 index widened 1 basis point to a spread of 60 bps on Friday.

AT&T Inc.’s 4.8% notes due 2044 traded about 1 bp tighter in the secondary market but remain wider from where the notes priced in June, according to a market source.

Bank of America Corp.’s 4% notes due 2024 improved 1 bp from where the notes traded on Friday, a source said.

AT&T better

AT&T’s 4.8% notes due 2044 (A3/A-/A) firmed about 1 bp to 143 bps offered, a market source said.

AT&T sold $2 billion of the 30-year notes at a spread of Treasuries plus 140 bps on June 3.

The telecommunications company is based in Dallas.

Bank of American firms

Bank of America’s 4% notes due 2024 (Baa2/A-/A) firmed 1 bp from Friday to 132 bps offered, according to a market source.

Bank of America sold $2.75 billion of the notes on March 27 at Treasuries plus 137 bps.

The financial services company is based in Charlotte, N.C.

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