Investment-grade primary quiet; light deal action forecast as year closes; Amazon.com firms

By Cristal Cody

Tupelo, Miss., Dec. 13 – Investment-grade bond issuers stayed to the sidelines on Wednesday with attention focused on the Federal Reserve’s monetary policy decision and Republicans’ impending tax reform deal.

The Markit CDX North American Investment Grade 29 index was mostly unchanged on the day at a spread of 50 basis points.

A few more high-grade bond offerings are expected to price this month in the primary market, but primary action overall is forecast to be mostly quiet as the year closes, a source said.

Kingstone Cos. Inc. announced plans on Wednesday to price an offering of senior unsecured notes (Kroll: BBB-) via bookrunner Sandler O’Neill + Partners, LP.

In the secondary market, Amazon.com, Inc.’s 3.15% notes due Aug. 22, 2027 tightened 2 bps during the session.

The company is conducting an exchange of 5.2% senior notes due 2025 from Whole Foods Markets Inc., which it acquired in August for $13.7 billion in cash. The tender offer for the bonds expires on Dec. 19.

Kroger Co.’s 3.7% senior notes due Aug. 1, 2027 eased 3 bps in the secondary market.

Amazon.com better

Amazon.com’s 3.15% notes due Aug. 22, 2027 traded on Wednesday 2 bps tighter at 70 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 online commerce company is based in Seattle.

Kroger widens

Kroger’s 3.7% notes due Aug. 1, 2027 eased 3 bps to 127 bps bid during the session, a source said.

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.

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