High-grade supply quiets; inflows decline; IHS Markit tightens; telecom bonds improve

By Cristal Cody

Tupelo, Miss., Aug. 22 – The investment-grade market stayed quiet on Thursday with no reported deals pricing in the primary market.

Week to date, corporate issuers have priced $9.65 billion of bonds, in line with the $10 billion of supply forecast for the week.

Light primary activity is predicted for the remainder of August, sources report.

On Friday, market participants are expected to turn their focus to Federal Reserve chair Jerome Powell’s speech at the Federal Reserve Bank of Kansas City’s economic policy symposium in Jackson Hole, Wyo.

The Markit CDX North American Investment Grade 32 index was mostly unchanged on the day at a spread of 55 basis points.

On Thursday, Lipper US Fund Flows reported corporate investment-grade fund inflows of $2.05 billion for the week ended Wednesday, compared to $4.03 billion of inflows in the previous week.

In the secondary market, new issues traded mostly better, a source said.

IHS Markit Ltd.’s 4.25% senior notes due May 1, 2029 (Ba1/BBB-/BBB) that were reopened on Wednesday tightened 10 bps.

The notes were quoted stronger at 160 bps in secondary trading after the issue priced at 108.036 to yield 3.254% and a spread of Treasuries plus 170 bps on Wednesday.

The London-based business information and analytics company first sold $600 million of the bonds on April 3 at 99.422 to yield 4.321%, or a Treasuries plus 180 bps spread. The total outstanding is $950 million.

In other secondary trading, Occidental Petroleum Corp.’s senior notes (Baa3/A) priced as part of a $13 billion 10-part offering earlier in the month were mixed.

Looking at the telecommunications sector, bonds were mostly better on the day.

AT&T Inc.’s 4.35% notes due March 1, 2029 firmed nearly 3 bps on Thursday.

Verizon Communications Inc.’s 3.875% green senior notes due Feb. 8, 2029 tightened 5 bps.

Occidental Petroleum mixed

Occidental Petroleum’s 2.9% notes due Aug. 15, 2024 tightened 6 bps to 128 bps bid in secondary trading on Thursday, a market source said.

The company sold $3 billion of the notes on Aug. 6 at a 140 bps over Treasuries spread.

Occidental Petroleum’s tranche of 3.5% notes due Aug. 15, 2029 eased 2 bps to 172 bps bid during the session.

The notes were priced in the Aug. 6 sale in a $1.5 billion tranche at a Treasuries plus 185 bps spread.

The oil and gas, chemical and midstream company is based in Los Angeles.

AT&T notes improve

AT&T’s 4.35% notes due March 1, 2029 improved 2.5 bps to 139.5 bps bid on Thursday, a market source said.

AT&T sold $3 billion of the 10-year notes on Feb. 13 at a spread of Treasuries plus 170 bps.

The telecommunications company is based in Dallas.

Verizon bonds tighten

Verizon Communications’ 3.875% green senior notes due Feb. 8, 2029 tightened 5 bps on the day to 93 bps bid, a market source said.

Verizon sold $1 billion of the notes (Baa1/BBB+/A-) on Feb. 5 at a spread of Treasuries plus 120 bps.

Verizon is a telecommunications company based in New York City.

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