High-grade market action quiets in pre-holiday session; Amazon.com eases; Kroger steady

By Cristal Cody

Tupelo, Miss., Dec. 22 – Market action remained light over Friday’s session in the high-grade bond market.

The week finished with zero reported bond issuance.

Supply is expected to pick up at a strong pace in January, according to market sources.

The Markit CDX North American Investment Grade 29 index softened about 1 basis point in the thin activity on Friday to close at a spread of 49 bps.

High-grade inflows increased to $2.37 billion from $1.21 billion for the week, though short-term investment-grade outflow climbed to $3.1 billion from $1.68 billion, the highest level since June 2016, according to a BofA Merrill Lynch research note.

Bonds were mixed in the secondary market.

Amazon.com, Inc.’s 3.15% notes due Aug. 22, 2027 (Baa1/AA-/) softened 3 bps to 70 bps bid, a source said.

Amazon.com sold $3.5 billion of the notes on Aug. 15 at a spread of Treasuries plus 90 bps.

The Seattle-based online commerce company closed in August on its $13.7 billion acquisition of Whole Foods Markets Inc.

Kroger Co.’s senior notes (Baa1/BBB/BBB) were unchanged on the day but have traded tighter over the month. The Cincinnati-based grocery retailer’s 3.7% notes due 2027 headed out flat at 114 bps bid, a source said.

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

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