Starbucks prices $500 million issue; Xerox stable; Time Warner softens; McDonald’s firms

By Cristal Cody

Tupelo, Miss., Feb. 1 – The investment-grade bond market got off to a slow start to February with one corporate issuer pricing an issue on Monday.

Starbucks Corp. sold $500 million of 2.1% five-year senior notes at a spread of 75 basis points over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes (A2/A-/A) priced at 99.943 to yield 2.112%.

Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

Bonds were mixed in secondary trading, and credit spreads softened over the day.

Xerox Corp.’s 3.5% senior notes due 2020 were quoted unchanged at 222 bps bid on Monday. The company announced on Friday that it will split into two publicly traded companies. Fitch Ratings and Standard & Poor’s downgraded the company’s ratings on the plan.

Time Warner Inc.’s 3.875% notes due 2026 widened 7 bps over the session to 208 bps bid, a market source said.

McDonald’s Corp.’s 3.7% notes due 2026 firmed 1 bp to 164 bps bid in the secondary market.

The Markit CDX North American Investment Grade 25 index eased 3 bps to a spread of 104 bps.

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