Midday Commentary: High-grade bond spreads stable; AT&T firms; financial paper mostly flat

By Cristal Cody

Tupelo, Miss., June 4 - Investment-grade bond spreads have remained stable over the week as market participants focus on the upcoming May jobs report scheduled for release on Friday by the Labor Department, sources said early Wednesday.

The Markit CDX North American Investment Grade series 22 index closed unchanged on Tuesday at a spread of 62 basis points.

Primary issuance has been strong with more than $12 billion of high-grade issuance brought in the previous session and nearly $25 billion for the week so far, according to a market source.

On tap for Wednesday's primary session, Verizon Communications Inc. plans to bring a two-part offering of senior notes.

The telecom sector was active in the secondary market early Wednesday, a source said.

AT&T Inc.'s new 4.8% global notes due 2044 brought on Tuesday traded about 4 bps tighter, according to a market source.

Financial paper was mixed with issues from Goldman Sachs Group Inc. and Morgan Stanley & Co. Inc. flat to slightly better, a source said.

AT&T tightens

AT&T's 4.8% notes due 2044 (A3/A-/A) tightened to 136 bps offered early Wednesday, a source said.

The notes rose to 100.32 in midday trading, according to a market source.

AT&T sold $2 billion of the 30-year notes at Treasuries plus 140 bps, or 99.636 to yield 4.823%, on Tuesday.

The telecommunications company is based in Dallas.

Goldman mostly flat

Goldman Sachs' 4% senior notes due 2024 (Baa1/A-/A) traded mostly unchanged to 1 bp tighter at 126 bps offered, a source said.

The notes fell to 101.09 in midday trading from where the paper closed at 101.62 on Tuesday, according to a market source.

Goldman sold $3 billion of the 10-year notes on Feb. 26 at 99.698 to yield 4.037%, or 137.5 bps plus Treasuries.

The financial services company is based in New York City.

Morgan Stanley unchanged

Morgan Stanley's 3.875% notes due 2024 (Baa2/A-/A-) traded flat at 126 bps offered, a source said.

The notes rose to 100.25 on Wednesday from 100.74 in Tuesday's session, according to a market source.

Morgan Stanley sold $3 billion of the notes on April 23 at 99.124 to yield 3.982%, or a spread of Treasuries plus 130 bps.

The financial services company is based in New York City.

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