Midday Commentary: Investment-grade bonds mixed; Goldman paper weaker; Verizon widens

By Cristal Cody

Tupelo, Miss., March 28 - Investment-grade bond spreads were mixed in early trading on Friday, according to market sources.

"The U.S. market traded mostly sideways this week, suggesting that it has become desensitized to the headlines," Barclays analysts said in a note on Friday. "In contrast to index tranquility, rates curves and single names saw significant volatility."

The Markit CDX North American Investment Grade series 22 index closed on Thursday 1 basis point tighter at a spread of 71 bps.

Goldman Sachs Group Inc.'s 4% senior notes due 2024 traded 4 bps weaker in the secondary market but remain tighter than where the paper priced in February, according to a market source.

Verizon Communications Inc.'s notes continued to widen in early trading, a source said.

Goldman weaker

Goldman Sachs' 4% notes due 2024 eased to 136 bps from 140 bps offered in the previous session, according to a market source early Friday.

Goldman priced $3 billion of the 10-year notes (Baa1/A-/A) on Feb. 26 with a spread of 137.5 bps over Treasuries.

The financial services company is based in New York City.

Verizon eases

Verizon's bonds have been among the most active high-grade issues over the week but continued to trade wider on Friday, a market source said.

The company's 6.55% bonds due 2043 widened 3 bps to 163 bps offered in early trading.

Verizon sold $15 billion of the bonds (Baa1/BBB+/A-) at Treasuries plus 265 bps in a $49 billion eight-part offering on Sept. 11.

The telecommunications company is based in New York City.

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