Morning Commentary: Investment-grade bonds soft at open; AT&T, Bank of America notes widen

By Cristal Cody

Tupelo, Miss., Oct. 16 – Investment-grade bonds started Thursday’s session mostly wider, continuing the weakness in credit spreads seen Wednesday, according to market sources.

The Markit CDX North American Investment Grade series 23 index closed 1 basis point softer at a spread of 74 bps in the previous session.

AT&T Inc.’s 4.8% bonds due 2044, among the most active investment-grade issues over the past two weeks, were quoted 2 bps weaker in early trading, according to a market source.

Bank of America Corp.’s 4.2% notes due 2024 have widened 7 bps from where the issue priced in August, a source said.

AT&T eases

In early secondary trading, AT&T’s 4.8% notes due 2044 eased 2 bps to 169 bps offered, a market source said.

The notes (A3/A-/A) headed out on Wednesday at 167 bps offered.

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

The telecommunications company is based in Dallas.

Bank of America weaker

Bank of America’s 4.2% notes due 2024 were quoted more than 5 bps weaker at 187 bps offered, according to a market source.

Bank of America sold $3 billion of the notes on Aug. 21 at 180 bps over Treasuries.

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

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