Investment-grade primary market quiet; Hershey bonds tighten; Amazon.com notes firm

By Cristal Cody

Tupelo, Miss., Dec. 18 – Activity was light on Monday with no high-grade bond issuance reported in the primary market.

Little issuance is expected ahead of the Christmas Day holiday with market participants forecasting up to about $2 billion of volume at most for the week.

In other activity, Hershey Co. announced plans to acquire health food snacks maker Amplify Snack Brands for $12 per share in cash. The deal, expected to close in the first quarter of 2018, is valued at $1.6 billion with debt and a make-whole payment of $76 million, according to a news release.

Hershey’s bonds tightened about 1 basis point to 4 bps in the secondary market during the session, a source said.

The company’s 2.3% notes due Aug. 15, 2026 traded 4 bps better at 69 bps bid on Monday.

The Hershey, Pa.-based maker of chocolate and confectionery products priced $500 million of the notes on Aug. 2, 2016 at a spread of 80 bps over Treasuries. The notes were sold as part of an $800 million two-tranche offering with proceeds used in part to fund Hershey’s acquisition of Ripple Brand Collective, LLC.

In other trading on Monday, AT&T Inc.’s 3.9% notes due Aug. 14, 2027 firmed about 1 bp.

The company was expected to close this year on its $85.4 billion cash and stock acquisition of Time Warner Inc. The Justice Department has filed a federal lawsuit to block the deal, and a trial date is set for March 19, 2018.

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) firmed 2 bps in secondary trading on Monday.

Elsewhere, Amazon.com, Inc.’s 3.15% notes due Aug. 22, 2027 remain better than issuance in the secondary market and came in 5 bps during the session.

The company closed in August on its $13.7 billion acquisition of Whole Foods Markets Inc.

Food retailer Kroger Co.’s 3.7% senior notes due 2027 improved about 3 bps over the day.

The Markit CDX North American Investment Grade 29 index tightened nearly 1 bp to end at a spread of 49.5 bps.

AT&T modestly firms

AT&T’s 3.9% notes due Aug. 14, 2027 traded about 1 bp better on Monday, a market source said.

AT&T sold $5 billion of the notes (Baa1/BBB+/A-) on July 27 at a spread of 160 bps over Treasuries.

The telecommunications company is based in Dallas.

Time Warner better

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) improved 2 bps during the session to 128 bps bid, according to a market source.

The company sold $800 million of the notes on May 5, 2016 at a spread of Treasuries plus 135 bps.

Time Warner is a New York-based media and entertainment company.

Amazon.com tightens

Amazon.com’s 3.15% notes due Aug. 22, 2027 tightened 5 bps on Monday to 72 bps bid, according to a market source.

Amazon.com sold $3.5 billion of the notes (Baa1/AA-/) on Aug. 15 at a spread of Treasuries plus 90 bps.

The commerce company is based in Seattle.

Kroger improves

Kroger’s 3.7% notes due 2027 firmed 3 bps in the secondary market to 123 bps bid, according to a market source.

The company sold $600 million of the notes (Baa1/BBB/BBB) on July 17 at a Treasuries plus 140 bps spread.

Kroger is a Cincinnati-based grocery retailer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.