Investment-grade primary action quiet; Kroger bonds tighten; AT&T, Time Warner soften

By Cristal Cody

Tupelo, Miss., Dec. 1 – The investment-grade bond stayed mostly quiet with no reported issuance on Friday.

Investment-grade supply is expected to be heavy over the first full week of December with about $30 billion of volume forecast, a source said.

Credit spreads ended the day less than 1 basis point softer with the Markit CDX North American Investment Grade 29 index at a spread of 53 bps.

In the secondary market, Kroger Co.’s senior notes (Baa1/BBB/BBB) went out about 5 bps to more than 10 bps better on Friday.

The company reported better-than-expected third quarter earnings the previous day and also announced it has received a strong amount of buyer interest in its chain of convenience stores.

The retail grocery business has been affected by Amazon.com, Inc.’s $13.7 billion acquisition of Whole Foods Markets Inc. that closed in August.

Amazon.com’s 3.15% notes due Aug. 22, 2027 priced in August traded 1 bp better on the day.

Elsewhere in the secondary market, AT&T Inc.’s bonds (Baa1/BBB+/A-) were mixed on Friday.

The Justice Department announced in November that it had filed a federal lawsuit to stop the company’s acquisition of Time Warner Inc.

The $85.4 billion cash and stock takeover was scheduled to close before the end of the year.

Time Warner’s notes (Baa2/BBB/BBB+) traded mostly softer over the day.

Kroger tightens

Kroger’s 3.7% notes due 2027 were quoted on Friday tighter at 128 bps bid from where the bonds traded in the 144 bps area the previous day, 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.

Amazon.com firms

Amazon.com’s 3.15% notes due Aug. 22, 2027 firmed about 1 bp to 76 bps bid in secondary trading, 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.

AT&T softens

AT&T’s 3.9% notes due Aug. 14, 2027 traded about 3 bps softer on Friday at 157 bps bid, a market source said.

AT&T sold $5 billion of the notes on July 27 at a spread of 160 bps over Treasuries.

The telecommunications company is based in Dallas.

Time Warner eases

Time Warner’s 2.95% notes due July 15, 2026 (Baa2/BBB/BBB+) eased about 2 bps to 130 bps bid in secondary trading, according to a market source.

The company sold $800 million of the notes on May 5, 2016 at a spread of Treasuries plus 135 bps.

Time Warner is a New York-based media and entertainment company.

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