Morning Commentary: McDonald’s firms; Visa softens; credit spreads open weaker

By Cristal Cody

Tupelo, Miss., Dec. 18 – High-grade bonds were mixed in early secondary trading on Friday and credit spreads eased as the market continues to take in the Federal Reserve’s first rate hike in nearly a decade.

McDonald’s Corp.’s 3.7% senior notes due 2026 traded 2 basis points tighter.

Visa Inc.’s 3.15% senior notes due 2025 eased 2 bps in early secondary trading.

The three-month Libor yield was unchanged at 53 bps at the start of the day.

The Markit CDX North American Investment Grade 25 index opened the session 2 bps weaker at a spread of 95 bps.

McDonald’s tightens

McDonald’s 3.7% notes due 2026 firmed 2 bps to 149 bps offered, according to a market source.

The company sold $1.75 billion of the notes (Baa1/BBB+/BBB+) on Dec. 2 at a spread of Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

Visa eases

Visa’s 3.15% notes due 2025 traded 2 bps softer at 93 bps offered early Friday, according to a market source.

The company sold $4 billion of the notes (A1/A+) on Dec. 9 at a spread of Treasuries plus 97 bps.

The retail electronic payments network operator is based in San Francisco.

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