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Midday Commentary: Investment-grade bonds firm at open; Verizon mixed in early trade
By Cristal Cody
Tupelo, Miss., Jan. 9 - High-grade bonds opened stronger on Thursday following more than $6 billion of U.S. corporate debt that priced in the previous session, according to market sources.
"Credit spreads are slightly narrower this morning after the three straight days of widening at the index level," RBC Capital Markets, LLC analysts said in a note on Thursday. "The widening that has occurred at the index level the past few days pales in comparison to the 10-15 bps moves tighter most of these indices enjoyed in December."
The Markit CDX North American Investment Grade series 21 index closed on Wednesday 1 basis point wider to a spread of 65 bps.
In the investment-grade secondary market, Verizon Communications Inc.'s bonds (Baa1/BBB+/A-) continue to be among the most active issues, according to market sources. The company's tranche of 5.15% notes due 2023 rallied over the past session, while the long bonds eased, a source said.
Verizon widens
Verizon's 5.15% notes due 2023 firmed more than 20 bps to 105 bps offered, a source said on Thursday.
The notes were quoted early Wednesday at 132 bps bid, 129 bps offered.
Verizon sold $11 billion of the 10-year notes at Treasuries plus 225 bps on Sept. 11.
Verizon's long tranche of 6.55% bonds due 2043 eased about 4 bps to 152 bps offered, the source said. The bonds traded early Wednesday at 152 bps bid, 149 bps offered.
Verizon sold $15 billion of the 30-year bonds at Treasuries plus 265 bps in the record $49 billion eight-tranche debt offering brought in September.
The telecommunications company is based in New York City.
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