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Morning Commentary: Morgan Stanley paper weak on missed quarterly revenue; Verizon bonds soft
By Cristal Cody
Tupelo, Miss., Jan. 20 – High-grade corporate bonds opened the trading session mixed with financial paper mostly weaker, according to market sources early Tuesday.
In the secondary market, Morgan Stanley’s paper widened more than 10 basis points and its stock slumped after the investment bank reported lower-than-expected fourth-quarter revenue, a source said.
Verizon Communications Inc.’s bonds (Baa1/BBB+/A-) traded softer ahead of the company’s fourth-quarter earnings release scheduled for Thursday, a market source said.
The Markit CDX North American Investment Grade series 23 index closed on Friday 1 bp tighter at a spread of 72 bps.
Morgan Stanley widens
Morgan Stanley’s 2.375% notes due 2019 (Baa2/A-/A) traded more than 10 bps wider at 119 bps offered, a market source said early Tuesday.
Morgan Stanley sold $2.5 billion of the notes at a spread of Treasuries plus 85 bps on July 17.
Before the session opened on Tuesday, Morgan Stanley reported earnings of 47 cents a share for the fourth quarter ended Dec. 31 versus 2 cents per share in the same period a year ago. Revenue was flat at $7.8 billion, lower than the $8 billion expected.
The financial services company is based in New York City.
Verizon weak
Verizon’s 4.4% notes due 2034 eased 5 bps to 180 bps offered, a market source said.
The bonds traded in mid-December at 165 bps offered.
Verizon sold $2.5 billion of the notes at Treasuries plus 145 bps on Oct. 22.
The company’s 6.55% bonds due 2043 were quoted 4 bps wider from Friday at 222 bps offered, according to the market source.
Verizon sold $15 billion of the bonds at 265 bps over Treasuries on Sept. 11, 2013.
The telecommunications company is based in New York City.
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