Midday Commentary: Investment-grade bond spreads tighten; DirecTV's new notes firm

By Cristal Cody

Tupelo, Miss., March 18 - Investment-grade bond spreads headed out tighter on Monday and continued to firm in the morning session on Tuesday, according to market sources.

The Markit CDX North American Investment Grade series 21 index had tightened 2 basis points to a spread of 65 bps on Monday.

"Corporate bond spreads have now unwound all of last week's softness," RBC Capital Markets, LLC analysts said in a note. "Anyone hoping to see some value emerge in the corporate bond market can only curse pension funds as there continue to be reports of strong demand from pension funds" for corporate issues.

"Yesterday's offerings were well received and calmed some concerns that began to emerge at the end of last week when new issue buyers appeared fatigued and a number of issues traded wide of their issue spreads," the analysts said.

In the secondary market, the 4.45% senior notes due 2024 that DirecTV Holdings LLC and DirecTV Financing Co. priced on Monday firmed about 1 bp on the offered side in early trading, according to a market source.

DirecTV better

DirecTV's 4.45% notes due 2024 traded slightly better on the offered side at 178 bps offered, a source said early Tuesday.

The notes (Baa2/BBB/) were quoted in aftermarket trading on Monday at 181 bps bid, 179 bps offered.

DirectTV sold $1.25 billion of the 10-year notes on Monday at a spread of Treasuries plus 180 bps.

The digital entertainment company is based in El Segundo, Calif.

© 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.