Midday Commentary: High-grade bonds continue to tighten; market eyes Verizon as bonds widen

By Cristal Cody

Tupelo, Miss., Sept. 9 - Investment-grade bonds tightened on Friday and continued to stay firmer overall in the early session on Monday, while Verizon Communication Inc.'s bonds moved out in trading, according to market sources.

Verizon's 2.45% notes due 2022 (Baa1/BBB+/A-) have widened 35 basis points to the 155 bps area, one source said on Monday.

The notes traded at 129 bps bid, 124 bps offered before the New York City-based telecommunications company officially announced on Sept. 2 that it plans to buy Vodafone Group plc's 45% stake in Verizon Wireless.

Also in the secondary market on Monday, Verizon's 5.55% notes due 2016 were "offered at 78 [bps] Friday - 90 [bps] this A.M.," a trader said.

Verizon is expected to sell $20 billion to $35 billion of bonds in U.S. dollar, euro and sterling denominations in the near term to help finance the Verizon Wireless buyout, sources report.

The Markit CDX Series 20 North American Investment Grade index ended Friday 2 bps tighter at a spread of 82 bps.

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