Morning Commentary: AT&T widens; Charter bonds weaker; investment-grade CDX unchanged

By Cristal Cody

Tupelo, Miss., Sept. 2 – High-grade bonds traded mostly softer in the secondary market on Wednesday morning while primary action remains quiet.

AT&T Inc.’s 3.4% notes due 2025 widened on Tuesday and traded about 2 basis points weaker early in the day.

Charter Communications Inc.’s senior secured notes (Ba1/BBB-) were seen about 4 bps to 5 bps wider in secondary trading.

The Markit CDX North American Investment Grade index was unchanged at the start of the session at a spread of 84 bps.

In economic data, private payroll processor ADP reported August private employment rose by 190,000, weaker than the 200,000 expected.

The Labor Department is scheduled to release the August non-farm payroll report on Friday. Market analysts forecast 220,000 non-farm jobs were added over the month. The unemployment rate is forecast to drop to 5.2% from 5.3% in July.

AT&T eases

AT&T’s 3.4% notes due 2025 traded about 2 bps weaker early Wednesday at 179 bps offered, a market source said.

The notes headed out about 8 bps wider on Tuesday at 184 bps bid.

AT&T sold $5 billion of the notes (/BBB+/A-) on April 23 at 150 bps over Treasuries.

The telecommunications company is based in Dallas.

Charter softens

Charter Communications’ 6.484% notes due 2045 eased about 5 bps to 342 bps offered in the secondary market, a source said.

The company sold $3.5 billion of the bonds (Ba1/BBB-) on July 9 at a spread of Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

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