Morning Commentary: Anheuser-Busch eases on downgrade; HSBC tightens

By Cristal Cody

Eureka Springs, Ark., May 26 – The investment-grade primary market geared up early Thursday for the last full session of the week with a $6 billion deal from Walgreens Boots Alliance, Inc. on tap for the day.

In the secondary market, Anheuser Busch InBev Finance Inc.’s 3.65% notes due 2026 softened 3 basis points following the downgrade of ratings for the parent company and its subsidiaries on Wednesday by Moody’s Investors Service.

HSBC Holdings plc’s 3.9% subordinated notes due 2026 traded 5 bps better early Thursday.

The Markit CDX North American Investment Grade index opened flat to modestly tighter at a spread of 77 bps.

The three-month Libor yield rose 1 bp to 67 bps on Thursday.

Secondary trading volume hit $18.78 billon on Wednesday, compared to $16.83 billion on Tuesday and $13.22 billion on Monday, according to Trace.

Anheuser-Busch softens

Anheuser Bush InBev’s 3.65% notes due 2026 softened 3 bps to 130 bps offered in the secondary market, a source said.

The company sold $11 billion of the notes (A3/A-/BBB+) on Jan. 13 at a spread of Treasuries plus 160 bps.

Anheuser Bush’s ratings were dropped to A3 from A2 by Moody’s on Wednesday, an action the rating agency attributed to the significant debt and high leverage the company will incur to complete its $106 billion cash and stock acquisition of SABMiller plc.

Fitch downgraded Anheuser Bush’s ratings to BBB+ from A earlier in the month.

The brewery is based in Leuven, Belgium.

HSBC firms

HSBC’s 3.9% notes due 2026 traded 5 bps tighter at 199 bps offered, according to a market source.

The company sold $2.5 billion of the notes (A1/A/AA-) on May 18 at Treasuries plus 210 bps.

London-based HSBC is a banking and financial services group.

© 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.