Muted session closes shortened week; activity to pick up in week ahead; Verizon bonds weaker

By Cristal Cody and Aleesia Forni

Virginia Beach, April 17 - The high-grade bond market ended the week with no new deals pricing during Thursday's shortened session.

As expected, this week's supply was limited with earnings season underway along with Thursday's early close and a closed bond market on Friday due to the Good Friday holiday.

More than $10 billion of investment-grade paper priced during the shortened week.

An upturn in activity is expected next week, with sources predicting around $20 billion to $25 billion of high-grade supply.

"Mostly financial names," a source said of the upcoming week's calendar.

Trading was light over the day with most traders out early, sources said.

Verizon Communications Inc.'s 6.55% bonds due 2043 traded down nearly a point on the week, according to a market source.

Investment-grade credit spreads were mostly flat to slightly tighter, a source said.

The Markit CDX North American Investment Grade series 22 index was seen ending the day 1 basis point tighter at a spread of 67 bps.

"Volatility stayed modest for credit markets during the holiday-shortened week," Barclays analysts said in a note on Thursday.

"While the major U.S. and European equity indices are flat to down for the year - driven in large part by emerging market concerns - investment-grade credit is 11 bps tighter year-to-date."

Verizon weaker

Verizon's 6.55% bonds due 2043 (Baa1/BBB+/A-) fell to the 122 area on Thursday from where the bonds traded on Monday at 123, according to a market source.

The company sold $15 billion of the 30-year bonds at 99.883 to yield 6.559% on Sept. 11, 2013.

Verizon is a telecommunications company based in New York City.

Bank/brokerage CDS unchanged to lower

Investment-grade bank and brokerage CDS prices were unchanged to lower, according to a market source.

Bank of America Corp.'s CDS costs were unchanged at 64 bps bid, 67 bps offered. Citigroup Inc.'s CDS costs firmed 1 bp to 70 bps bid, 73 bps offered. JPMorgan Chase & Co.'s CDS costs declined 1 bp to 57 bps bid, 60 bps offered. Wells Fargo & Co.'s CDS costs were flat at 37 bps bid, 40 bps offered.

Merrill Lynch's CDS costs were flat at 67 bps bid, 71 bps offered. Morgan Stanley's CDS costs tightened 3 bps to 75 bps bid, 80 bps offered. Goldman Sachs Group, Inc.'s CDS costs firmed 2 bps to 88 bps bid, 93 bps offered.

Paul Deckelman contributed to this review.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.