Midday Commentary: Sysco, Time Warner Cable bonds widen in early trade; Genworth eases

By Cristal Cody

Tupelo, Miss., Dec. 9 - The investment-grade bond market opened to a sleepy start on Monday with winter weather conditions slowing activity, according to market sources.

"It's quiet today," one source said. "The weather is pretty terrible."

Sysco Corp.'s bonds widened 25 basis points in early secondary trading on the company's announcement it will acquire US Foods, Inc. for about $8.2 billion in cash, stock and debt, a source said.

Sysco plans to buy Rosemont, Ill.-based privately owned food distributor US Foods for about $3.5 billion in cash and stock and assume or refinance about $4.7 billion of debt.

Moody's Investors Service placed Sysco's credit ratings on review for downgrade on the acquisition announcement.

Bonds from Time Warner Cable Inc., which is reportedly a takeover target by rival companies, widened about 10 bps from Friday's session, a source said.

In other trading, Genworth Holdings Inc.'s 4.85% senior notes due 2024 (Baa3/BBB-) eased about 2 bps from where the issue priced on Thursday, a market source said.

Sysco widens

In the secondary market, Sysco's 2.6% notes due 2022 (A1/A/) widened 25 bps to 90 bps bid, 80 bps offered, a market source said early Monday.

The Houston-based food service marketing and distribution company sold $450 million of the notes on June 6, 2012 with a spread of Treasuries plus 110 bps.

Time Warner Cable eases

Time Warner Cable's 4% notes due 2021 (Baa2/BBB/BBB) widened 10 bps to 270 bps bid, 260 bps offered, a source said on Monday.

In late November, the notes traded at 234 bps bid, 220 bps offered.

The New York City-based broadband communications company sold $1 billion of the notes on Sept. 7, 2011 at a spread of 210 bps over Treasuries.

Time Warner Cable's bonds have widened on reports that both Comcast Corp. and Charter Communications Inc. are eying the company for a possible merger.

Genworth eases slightly

Genworth Holdings' 4.85% senior notes due 2024 (Baa3/BBB-) were quoted Monday morning at 197 bps bid, 194 bps offered, a market source said.

"They're wrapped around new issuance," the source said.

Genworth sold $400 million of the notes on Thursday with a spread of Treasuries plus 195 bps.

The company is a subsidiary of Richmond, Va.-based Genworth Financial, Inc.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.