Fed leaves interest rates unchanged; primary silent; Kraft Heinz, Burlington Northern firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 17 – The high-grade bond primary market was quiet on Thursday as the Federal Reserve wrapped up its two-day policy meeting, deciding not to begin raising interest rates in September.

The Fed cited inflation, market volatility and a weak global economy in its decision.

“The committee anticipates that it will be appropriate to raise the target range for the Federal Funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective over the medium term,” the post-meeting statement said.

With players focused on the Fed, issuers stayed on the sidelines on Thursday, with no new deals pricing during the session.

This week has seen roughly $8.1 billion of new investment-grade paper price, far short of what was predicted to be around $25 billion to $30 billion of supply.

Investment-grade bonds were mixed in secondary trading, while credit spreads improved over the day.

Kraft Heinz Co.’s 3.95 notes due 2025 tightened about 10 basis points over the session.

Hershey Co.’s 3.2% notes due 2025 were unchanged in secondary trading.

Burlington Northern Santa Fe LLC’s debentures (A3/BBB+) headed out flat to about 3 bps tighter.

HSBC Holdings plc’s 4.25% subordinated notes due 2025 were flat.

The Markit CDX North American Investment Grade index improved 1 bp to a spread of 76 bps on Thursday.

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