Morning Commentary: High-grade credit spreads firm; Verizon flat, Zoetis eases in secondary

By Cristal Cody

Tupelo, Miss., Nov. 21 – High-grade credit spreads firmed more than 1 basis point as the session opened on Friday, according to market sources.

The Markit CDX North American Investment Grade series 23 index ended 1 bp tighter at a spread of 66 bps on Thursday.

Verizon Communications Inc.’s bonds were mostly flat but continue to be active in secondary trading, sources said.

Zoetis Inc.’s 4.7% bonds due 2043 have weakened in the secondary market over the month, according to market sources.

Verizon stable

Verizon’s 5.15% notes due 2023 (Baa1/BBB+/A-) traded unchanged at 133 bps offered, according to a market source.

The notes were quoted up slightly at 111.157 to yield 3.656% early Friday from where the issue ended the previous session at 111.097 to yield 3.665%.

Verizon sold $11 billion of the notes at Treasuries plus 225 bps, or 99.676 to yield 5.192%, on Sept. 11, 2013.

The telecommunications company is based in New York City.

Zoetis’ 4.7% bonds due 2043 were quoted 5 bps wider at 198 bps offered, a market source said.

The bonds (Baa2/BBB-/) were last seen in secondary trading at 94.95 to yield 5.037%, down from a high of 106.4 to yield 4.302% on Oct. 27, according to a source.

Zoetis brought the issue as part of a $3.65 billion four-part sale of senior notes on Jan. 16 in the company’s first bond offering.

Zoetis priced $1.15 billion of the 4.7% notes due 2043 at 99.268 to yield 4.746% with a spread of Treasuries plus 175 bps.

The New York City-based animal health company is partially owned by Pfizer Inc.

© 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.