Morning Commentary: Investment-grade bond spreads soft; Time Warner mixed; Tyson unchanged

By Cristal Cody

Tupelo, Miss., Aug. 6 – Investment-grade bonds remained modestly weaker early Wednesday after widening in the previous session, market sources said.

The Markit CDX North American Investment Grade series 22 index ended 2 basis points wider on Tuesday at a spread of 66 bps.

Time Warner Inc.’s senior notes (Baa2/BBB/BBB+) brought in May traded flat to slightly better over the morning after Rupert Murdoch’s 21st Century Fox Inc. withdrew its acquisition offer following the close of business on Tuesday, a source said.

Time Warner had rebuffed 21st Century Fox’s offer in July to acquire the media and entertainment company for about $80 billion in cash and stock.

Tyson Foods Inc.’s existing bonds were unchanged in early trading following the company’s $3.25 billion four-part offering of senior notes brought on Tuesday to fund its acquisition of Hillshire Brands Co., a market source said.

Tyson’s new issues tightened 6 bps to 10 bps in aftermarket trading.

Time Warner mixed

Time Warner’s 2.1% notes due 2019 are nearly unchanged from July, a market source said.

The notes were flat in early trading at 99.33 to yield 2.247%.

On July 16, the bonds were quoted at 99.33 to yield 2.245%.

Time Warner sold $650 million of the five-year notes at 99.948 to yield 2.111% on May 20.

The company’s 3.55% notes due 2024 rose to 100.84 to yield 3.446% over the morning from 99.85 to yield 3.567% on Tuesday, according to the market source.

Time Warner sold $600 million of the notes at 99.908 to yield 3.561% in the May offering.

The media and entertainment company is based in New York.

Tyson unchanged

Tyson Foods’ 4.5% notes due 2022 (Baa3/BBB/BBB) were unchanged in early trading at 106.29 to yield 3.549% on Wednesday, according to a market source.

The notes have improved from where they traded in the 105.50 area in May.

Tyson Foods sold $1 billion of the notes on June 6, 2012 at 99.458 to yield 4.568%.

The beef, pork and poultry company is based in Springdale, Ark.

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