Verizon’s 5.9% $25-par notes busy, lower amid reports of Yahoo! deal; Goldman Sachs ends mixed

By Stephanie N. Rotondo

Seattle, July 22 – Verizon Communications Inc.’s 5.9% $25-par notes due 2054 (NYSE: VZA) were active in early Friday trading, falling 15 cents to $28.32.

A trader noted that there was one large block of notes that traded that made up most of the early trading action.

“That really ripped up,” the trader noted, adding that the paper was “overvalued” and trading at spreads barely over Treasuries – about 1% to the 2019 call date.

By the end of business, the notes had recovered some, but not all of its losses, ending off just 6 cents at $28.41.

The activity could be due to reports that Verizon is close to inking a deal to acquire Yahoo! Inc.’s internet business.

Bloomberg reported Friday that Verizon is looking at paying close to $5 billion for the unit.

Meanwhile, Goldman Sachs Group Inc. was also among the day’s more actively traded names.

A trader said the New York-based investment’s bank’s $650 million of 5.3% $1,000-par series O fixed-to-floating rate preferreds – a deal priced Wednesday – continued to be “strong.” He placed the issue at “101 and change” bid.

Another market source said the paper finished the day at 101.75.

As for the firm’s $25-par preferreds, the series J securities (NYSE: GSPJ) ticked up 3 cents to $26.84, though the series I securities (NYSE: GSPI) dipped 4 cents to $25.90.

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