High-grade primary action quiet; spreads widen; Hyundai holds roadshow; Starbucks improves

By Cristal Cody

Tupelo, Miss., May 29 – High-grade credit spreads widened on Tuesday following the long holiday weekend and issuers stayed to the sidelines during the session.

The Markit CDX North American Investment Grade 30 index closed the day about 6 basis points wider from Friday at a spread of 68 bps.

Stocks slid and Treasuries rallied in a risk-off trade over growing concerns with Italy’s government as Italian bond yields soared over the day. The U.S. 10-year bond yield ended 16 bps lower at 2.77%.

The investment-grade bond deal pipeline remained quiet with no reported issuers.

Syndicate sources forecast about $20 billion of volume for the week.

Hyundai Capital America (Baa1/A-/) is holding a roadshow in the United States, Europe and Asia markets for a Rule 144A and Regulation S dollar-denominated note offering, according to an informed source.

The Irvine, Calif.-based auto financing arm of the Hyundai Motor Co. will hold the roadshow through Friday.

BofA Merrill Lynch, Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Societe Generale CIB and RBC Capital Markets, LLC are the arrangers.

Starbucks better

In other activity, Starbucks Corp.’s senior notes (A3/A-/A-) improved in secondary trading over Tuesday’s session, a source said. The notes were mixed at the start of the day.

The Seattle-based specialty coffee retailer closed its 8,000 stores early on Tuesday for diversity training.

The company’s 3.1% notes due March 1, 2023 ended the day better at 100.46 from 99.05 on Friday. The notes were seen at 99.66 in mid-morning secondary trading.

Starbucks sold $1 billion of the five-year notes on Feb. 26 at 99.968 to yield 3.107% and a spread of 50 bps over Treasuries.

The company’s 3.5% notes due March 1, 2028, which had softened to 99.03 at the start of the day from 99.32 on Friday, closed up at 100.32.

Starbucks sold $600 million of the notes in the Feb. 26 sale at 99.757 to yield 3.529%, or a Treasuries plus 67 bps spread.

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