Morning Commentary: Global concerns shake markets; Oracle softens; credit spreads leak wider

By Cristal Cody

Eureka Springs, Ark., July 6 – High-grade bonds traded mostly flat to softer early Wednesday as stocks slipped, oil sold off and post-Brexit global concerns were renewed with Britain’s pound falling below $1.30 for the first time in more than 30 years.

Oracle Corp.’s senior notes (A1/AA-) widened about 6 basis points to 8 bps in the secondary market.

Anheuser-Busch InBev Finance Inc.’s 3.65% senior notes due 2026 remain active but traded flat over the morning.

Credit spreads continued to leak wider on Wednesday. The Markit CDX North American Investment Grade index opened about 2 bps softer at a spread of 81 bps.

The three-month Libor yield rose 1 bp to 66 bps.

On Tuesday, $14.47 billion of investment-grade issues were traded, according to Trace.

Oracle eases

Oracle’s 2.65% notes due 2026 widened 8 bps to 115 bps offered in the secondary market, a source said.

The notes were quoted 8 bps tighter on Tuesday at 107 bps offered.

The company sold $3 billion of the notes on June 29 at Treasuries plus 120 bps.

The computer software and technology company is based in Redwood City, Calif.

Anheuser-Busch flat

Anheuser-Busch’s 3.65% notes due 2026 were unchanged at 125 bps offered early Wednesday after heading out 4 bps tighter at 130 bps bid in the previous session, according to market sources.

The company sold $11 billion of the notes (A2/A-) on Jan. 13, 2016 at a spread of Treasuries plus 160 bps.

The brewery is based in Leuven, Belgium.

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