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Morning Commentary: Kraft Heinz steady in trading; JPMorgan notes firm; credit spreads ease
By Cristal Cody
Tupelo, Miss., Aug. 11 – The newly formed Kraft Heinz Co.’s bonds were active but unchanged in early secondary trading after the combined company reported pre-merger second-quarter results after the markets closed on Monday.
H.J. Heinz Co. reported a loss of $164 million in the second quarter, compared to a profit of $127 million in the same period a year ago. Kraft Foods Group, Inc. reported second-quarter income of $551 million compared to $482 million reported in the year-ago period.
In other trading, JPMorgan Chase & Co.’s 3.9% senior holding company notes due 2025 were about 1 basis point tighter.
The Markit CDX North American Investment Grade index eased 1 bp to a spread of 75 bps at the start of the session.
The CDX is about 4.5 bps wider from a month ago, according to a Barclays Bank plc market note on Tuesday.
The CDX has ranged from a low spread of 60.4 bps to a high spread of 76.4 bps over the past 12 months, Barclays said.
Kraft Heinz stable
The 5.2% long bonds that Heinz sold in June ahead of the merger with Kraft traded flat at 199 bps offered, a market source said.
Heinz sold $2 billion of the bonds (Baa3/BBB-) at 200 bps over Treasuries on June 23 as part of a $10 billion seven-part deal.
Kraft acquired Heinz in a merger that closed on July 2.
The combined food and beverage company is based in Pittsburgh and Northfield, Ill.
JPMorgan improves
JPMorgan Chase’s 3.9% notes due 2025 were seen about 1 bp tighter at 151 bps offered, according to a market source.
JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on July 14 at Treasuries plus 155 bps.
The financial services company is based in New York City.
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