Managers clean up as record-busting Verizon bonds see yields tighten

Bond fund managers who bought into the US dollar-denominated issuance from Verizon have seen an immediate boost to performance after the bargain-basement priced bonds saw values jump and yields come in.

Immediately after the bonds became free to trade, spreads tightened sharply, with longer-dated tranches coming in as much as 45bps, while the three-year tranche came in by a staggering 60bps. Tightening of more than 20bps on the first day of trading is rarely seen, let alone levels above that. The record deal - which dwarfs bond sales from tech giant Apple and other US-listed companies - was vastly over-subscribed, with the $102bn of orders received more than double the $49bn of corporate debt issued. The dollar-issuance of the bonds by Verizon was so successful that the group has pul...