Morning Commentary: Anheuser-Busch, Home Depot bonds soften; credit spreads hit new wides

By Cristal Cody

Tupelo, Miss., Feb. 9 – High-grade bonds traded mostly weaker early Tuesday and credit spreads opened at the widest levels seen over the past year, according to market sources.

Anheuser-Busch InBev Finance Inc.’s senior notes (A2/A-) that priced in January traded about 8 basis points to 13 bps weaker in the secondary market.

Home Depot Inc.’s senior notes (A2/A/A) were softer over the morning.

Credit spreads hit new 12-month highs on Monday and continued to widen early Tuesday.

The Markit CDX North American Investment Grade index opened 4 bps weaker at a spread of 124 bps. The CDX index closed 5 bps wider on Monday at a spread of 120 bps.

Over the past 12 months, the index has been as low as 60.7 bps, according to a Barclays report.

The three-month Libor yield was stable early Tuesday at 62 bps.

Nearly $11 billion of investment-grade bonds were traded on Monday, according to Trace.

Anheuser-Busch eases

Anheuser-Busch’s 3.65% notes due 2026 eased 8 bps to 166 bps offered in secondary trading, a market source said.

The company sold $11 billion of the notes on Jan. 13 at a spread of Treasuries plus 160 bps.

The brewery is based in Leuven, Belgium.

Home Depot softens

Home Depot’s 2% notes due 2021 traded 5 bps weaker at 80 bps offered, according to a market source.

The company sold $1.35 billion of the notes at 80 bps over Treasuries on Feb. 3.

The home improvement retailer is based in Atlanta.

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