Morning Commentary: Anheuser-Busch improves in secondary market; broader high-grade market better

By Cristal Cody

Tupelo, Miss., Jan. 25 – High-grade bonds traded mostly tighter early Monday with activity fairly quiet over the morning following a weekend snowstorm that hit the East Coast of the United States.

Anheuser-Busch InBev Finance Inc.’s senior notes (A2/A-) that priced earlier in the month in a $46 billion deal to help fund its acquisition of SABMiller firmed in the secondary market on Monday.

The three-month Libor yield was stable at 62 basis points.

Anheuser-Busch’s 3.3% notes due 2023 were quoted 4 bps tighter early Monday at 143 bps offered in the secondary market, a source said.

The notes edged lower to 100.35 from 100.37 on Friday.

The company sold $6 billion of the notes on Jan. 13 at Treasuries plus 150 bps, or 99.621 to yield 3.361%.

Anheuser-Busch’s 3.65% notes due 2026 improved 5 bps in secondary trading but remained about 1 bp weaker than issuance at 161 bps offered, according to the market source. The notes rose to 100.07 early Monday from 99.86 on Friday.

The company sold $11 billion of the 10-year notes in the Jan. 13 offering at a spread of Treasuries plus 160 bps. The notes priced at 99.833 to yield 3.67%.

Anheuser-Busch’s 4.9% notes due 2046 traded 1 bp tighter at 202 bps offered, according to the market source. The notes were up mid-morning at 101.25 from 100.76 on Friday.

The notes were sold in an $11 billion tranche at Treasuries plus 205 bps, or 99.765 to yield 4.915%, in the Jan. 13 sale.

The brewery is based in Leuven, Belgium.

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