High-grade action thins; AT&T softens; Time Warner better; Amazon.com firms; Kroger eases

By Cristal Cody

Tupelo, Miss., Aug. 30 – No reported corporate issuers tapped the investment-grade bond market on Wednesday.

Market action remains light over the last week of August.

The Markit CDX North American Investment Grade index ended about 1 basis point better at a spread of 59 bps.

In the secondary market, AT&T Inc.’s notes were mixed over the session. The company plans to acquire Time Warner Inc. in an $85.4 billion cash and stock deal expected to close before the end of the year.

Time Warner’s 2.95% notes due 2026 tightened 5 bps.

Also on Wednesday, Amazon.com, Inc.’s 3.15% notes due Aug. 22, 2027 firmed 3 bps.

The company closed on Monday on its $13.7 billion cash acquisition of Whole Foods Markets Inc.

Moody’s Investors Service on Wednesday raised its ratings on Whole Foods’ 5.2% senior notes due Dec. 3, 2025 to Baa1 from Baa3.

S&P Global Ratings on Tuesday raised its rating on the notes to A+ from BBB-.

Whole Foods’ notes tightened 12 bps in secondary trading on Wednesday.

Kroger Co.’s 3.7% senior notes due Aug. 1, 2027 headed out 4 bps weaker.

AT&T, Time Warner mixed

AT&T’s 4.25% notes due March 1, 2027 (Baa1/BBB+/A-) softened about 4 bps to 173 bps bid on Wednesday, a market source said.

The Dallas-based telecommunications company sold $2 billion of the notes on Jan. 31, 2017 at a spread of Treasuries plus 180 bps.

Time Warner’s 2.95% notes due 2026 firmed 5 bps to 149 bps bid during the trading session.

Time Warner (Baa2/BBB/BBB+) sold $800 million of the notes on May 5, 2016 at a spread of 135 bps over Treasuries.

The media and entertainment company is based in New York.

Amazon.com, Whole Foods firm

Amazon.com’s 3.15% notes due Aug. 22, 2027 firmed 3 bps in the secondary market to 83 bps bid, according to a market source.

The Seattle-based online commerce company sold $3.5 billion of the notes (Baa1/AA-/) on Aug. 15 as part of a $16 billion seven-tranche offering at a spread of Treasuries plus 90 bps.

Whole Foods Market’s 5.2% notes due Dec. 3, 2025 (Baa1/A-/) came in 12 bps to 76 bps after widening 11 bps in the previous session.

Whole Foods sold $1 billion of the notes on Nov. 30, 2015 at a spread of Treasuries plus 300 bps.

Kroger softens

Kroger’s 3.7% notes due Aug. 1, 2027 eased 4 bps to 157 bps bid, a market 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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