Morning Commentary: Hewlett-Packard short-dated notes firm, long end weak; AT&T softens

By Cristal Cody

Tupelo, Miss., Oct. 2 – High-grade bonds saw mixed trading early Friday as the primary market quieted and traders focused on the September jobs report.

The Labor Department announced that 142,000 jobs were added in September, well below the 201,000 forecasted for the non-farm payrolls report. The unemployment rate was unchanged for the month at 5.1%.

Hewlett-Packard Enterprise Co.’s senior notes (Baa2/BBB/A-) that priced on Wednesday were mixed in secondary trading. The short end of the $14.6 billion nine-part offering improved, while the long end widened.

AT&T Inc.’s 3.4% notes due 2025 were seen 1 basis point weaker from late afternoon trading on Thursday.

The three-month Libor yield was unchanged at 33 bps.

The Markit CDX North American Investment Grade 25 index closed on Thursday 2 bps wider at a spread of 95 bps, the widest range of the year.

Hewlett-Packard mixed

Hewlett-Packard Enterprise’s 2.45% notes due 2017 traded at 180 bps offered, tighter than where the company sold the issue in a $2.25 billion tranche at Treasuries plus 185 bps.

The company’s 3.6% notes due 2020 were quoted at 221 bps offered in secondary trading. The notes priced in a $3 billion offering at Treasuries plus 225 bps.

Hewlett-Packard’s $2.5 billion offering of 4.9% notes due 2025, which priced at Treasuries plus 290 bps, traded slightly weaker at 292 bps offered.

The $1.5 billion issue of 6.35% bonds due 2045 was quoted wider at 358 bps offered. The company sold the bonds at a spread of Treasuries plus 350 bps.

Hewlett Packard Enterprise is a Palo Alto, Calif.-based information technology company and subsidiary of the Hewlett-Packard Co.

AT&T eases

AT&T’s 3.4% notes due 2025 were quoted about 1 bp softer at 191 bps offered in the secondary market, a source said.

The notes (/BBB+/A-) traded late Thursday afternoon 8 bps tighter at 192 bps bid.

The company sold $5 billion of the notes on April 23 at 150 bps over Treasuries.

The telecommunications company is based in Dallas.

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