Morning Commentary: Investment-grade bond spreads stable; Verizon, AT&T mostly flat

By Cristal Cody

Tupelo, Miss., Aug. 20 – Activity was quiet early Wednesday in the investment-grade bond market with traders focused on the afternoon release of the minutes from the July policy meeting of the Federal Reserve.

The Markit CDX North American Investment Grade series 22 index ended flat on Tuesday at a spread of 57 basis points.

Telecom bonds were active in secondary trading but mostly unchanged, according to a market source.

Verizon Communications Inc.’s 6.55% bonds due 2043, one of 11 issues the company plans to exchange for new paper, traded flat to about 1 bp tighter, a source said.

AT&T Inc.’s 4.35% bonds due 2045 were flat in the secondary market, according to a market source.

Verizon flat to better

Verizon’s 6.55% bonds due 2043 (Baa1/BBB+/A-) traded flat to 1 bp better at 160 bps offered, a source said early Wednesday.

Verizon sold $15 billion of the bonds at a spread of Treasuries plus 265 bps on Sept. 11, 2013.

The telecommunications company is based in New York City.

AT&T unchanged

AT&T’s 4.35% bonds due 2045 (A3/A-/A) were unchanged in early trading at 142 bps offered, according to a market source.

AT&T sold $3 billion of the bonds in 2012.

The telecommunications company is based in Dallas.

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