High-grade primary market quiet; bonds mostly flat in secondary market; credit spreads stable

By Cristal Cody

Eureka Springs, Ark., June 22 – Investment-grade issuers stayed on the sidelines Wednesday on the eve of the Brexit vote.

Volume has been thin with less than $4 billion priced through Wednesday, and issuance is expected to stay below $10 billion for the week, according to market sources.

The Markit CDX North American Investment Grade index was flat to about ½ basis point softer on the day at a spread of 79 bps.

Investment-grade bonds were mostly steady in the secondary market over the session.

AT&T Inc.’s 4.125% senior notes due 2026 headed out flat.

Duke Energy Progress Inc.’s bonds were unchanged over the day.

Commonwealth Edison Co.’s 3.65% mortgage bonds due 2046 that priced on Monday traded wrapped around issuance earlier on Wednesday.

AT&T steady

AT&T’s 4.125% notes due 2026 (Baa1//A-) were unchanged on Wednesday at 171 bps bid, according to a market source.

The company sold a $900 million tap of the bonds on May 3 at Treasuries plus 150 bps.

The notes originally were priced on Jan. 29 in a $1.5 billion offering at 195 bps over Treasuries.

AT&T is a Dallas-based telecommunications company.

Duke Energy flat

Duke Energy Progress’ 3.25% first mortgage bonds due 2025 were flat in the secondary market at 77 bps bid after tightening 3 bps in the previous session, a source said.

The company sold $500 million of the bonds on Aug. 10, 2015 at Treasuries plus 105 bps.

The Raleigh, N.C.-based company is an electricity distributor in North Carolina and South Carolina.

Commonwealth Edison flat

Commonwealth Edison’s 3.65% mortgage bonds due 2046 were unchanged from issuance at 120 bps offered in secondary trading early in the session, a market source said.

The company sold $700 million of the 30-year bonds (A2/A-/A) on Monday at 120 bps over Treasuries.

Commonwealth Edison is a unit of Chicago-based energy provider Exelon Corp.

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