Morning Commentary: Investment-grade bonds mixed; new PepsiCo notes tighten; Charter eases

By Cristal Cody

Tupelo, Miss., Oct. 9 – High-grade bonds were mixed at the start of the session early Friday, while PepsiCo Inc.’s new bonds tightened, according to market sources.

PepsiCo’s tranche of 4.45% senior notes due 2046 was nearly 10 basis points tighter in the secondary market.

Charter Communications Inc.’s 6.484% senior secured notes due 2045 eased 2 bps but are trading better than issuance.

Secondary trading thinned on Thursday to $14.47 billion of high-grade issues traded, down from $17.29 billion of investment-grade bonds traded on Wednesday, according to Trace data.

The Markit CDX North American Investment Grade 25 index closed the previous session 2 bps tighter at a spread of 81 bps.

PepsiCo tightens

PepsiCo’s 4.45% bonds due 2046 tightened to 141 bps offered in the secondary market, a source said.

The company sold $750 million of the notes (A1/A) on Thursday as part of a $3 billion four-part offering at a spread of 150 bps over Treasuries.

The global food and beverage company is based in Purchase, N.Y.

Charter softens

Charter Communications’ 6.484% notes due 2045 traded 2 bps wider at 333 bps offered, according to a market source.

The company sold $3.5 billion of the bonds (Ba1/BBB-) on July 9 at Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

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