Morning Commentary: Investment-grade bond market activity thins; AutoZone, Verizon better

By Cristal Cody

Tupelo, Miss., April 13 – Action in the high-grade bond markets slowed on Thursday with little activity expected over the short market session.

The bond markets will close at 2 p.m. ET and will be closed for the full day on Friday for the Good Friday holiday.

More than $7 billion of high-grade bonds priced in the first three days of the week.

About $10 billion of weekly deal volume was expected by syndicate sources.

In the secondary market early Thursday, AutoZone, Inc.’s 3.75% senior notes due June 1, 2027 traded modestly better.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 improved in early secondary trading.

The three-month Libor yield was steady at 1.16%.

Secondary market volume hit $14.84 billion on Wednesday, compared to $16.04 billion on Tuesday and $13.12 billion on Monday, according to Trace.

AutoZone improves

AutoZone’s 3.75% senior notes due June 1, 2027 that priced a week ago traded better on Thursday at 101.01 from 100.87 on Wednesday, a market source said.

AutoZone (Baa1/BBB/BBB) sold $600 million of the notes on April 6 at 99.995 to yield 3.75%, or 140 basis points over Treasuries.

The auto parts and supplies retailer is based in Memphis.

Verizon gains

Verizon Communications’ 4.125% notes due March 16, 2027 improved in early secondary trading to 102.68 from where the notes went out on Wednesday at 102.54, a market source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at 99.256 and a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

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