Morning Commentary: High-grade spreads at widest of year; DirecTV, Citi, Verizon bonds soft

By Cristal Cody

Tupelo, Miss., Dec. 11 – Investment-grade bonds remained soft early Thursday after credit spreads eased in the previous session to the widest of the year, market sources said.

The 3.95% senior notes due 2024 that DirecTV Holdings LLC and DirecTV Financing Co. priced a week ago traded 2 basis points weaker, a source said.

Citigroup Inc.’s 3.75% notes due 2024 widened 4 bps, according to a source.

In the telecommunications sector, Verizon Communications Inc.’s bonds eased 1 bp, a market source said.

The Markit CDX North American Investment Grade series 23 index closed 3 bps wider at a spread of 68 bps on Wednesday, the widest spread of the year, according to RBC Capital Markets, LLC.

DirecTV eases

DirecTV’s 3.95% notes due 2025 (Baa2/BBB/BBB-) eased 2 bps in secondary trading to 168 bps offered, a market source said.

DirecTV Holdings and DirecTV Financing sold $1.2 billion of the 10-year notes on Dec. 2 at a spread of Treasuries plus 175 bps.

The digital entertainment company is based in El Segundo, Calif.

Citi paper widens

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) were quoted 4 bps wider at 129 bps bid, a market source said.

The bank sold $1.25 billion of the 10-year notes on June 9 at Treasuries plus 115 bps.

Citigroup is based in New York City.

Verizon soft

Verizon’s 4.4% notes due 2034 (Baa1/BBB+/A-) traded 1 bp weaker at 165 bps offered in the secondary market, a source said.

Verizon sold $2.5 billion of the notes at a spread of Treasuries plus 145 bps on Oct. 22.

The telecommunications company is based in New York City.

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