High-grade primary quiet; bank, financial paper mixed; Whole Foods flat; Kroger mixed

By Cristal Cody

Tupelo, Miss., June 22 – High-grade issuers stayed out of the primary market on Thursday as the summer lull kicked in, according to market sources.

For the week so far, investment-grade bond issuance has totaled just under $20 billion.

Several deals remain in the pipeline, a source said.

In the secondary market, bank and financial paper was mixed on Thursday.

BB&T Corp.’s 2.75% senior medium-term notes due April 1, 2022 were flat.

Mitsubishi UFJ Financial Group, Inc.’s 3.677% senior notes due Feb. 22, 2027 softened 2 basis points.

Citigroup, Inc.’s 4.75% subordinated notes due May 18, 2046 were unchanged on the day.

Whole Foods Market Inc.’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) have settled in the 105 bps area over the last couple of sessions, a market source said.

Whole Foods’ bonds firmed about 85 bps on Friday to 92 bps bid after Amazon.com, Inc. announced it will purchase the natural and organic foods grocer for $13.7 billion in cash.

Austin, Texas-based Whole Foods sold $1 billion of the notes on Nov. 30, 2015 at a Treasuries plus 300 bps spread.

Kroger Co.’s senior notes (Baa1/BBB/BBB) were mixed but have remained soft since the Whole Foods deal was announced, according to a market source.

The Markit CDX North American Investment Grade index tightened more than 1 bp to a spread of 61 bps.

BB&T unchanged

BB&T’s 2.75% notes due April 1, 2022 were unchanged on the day at 64 bps bid, a market source said.

The company sold $1 billion of the notes (A2/A-/A+) on March 16 at a spread of 75 bps over Treasuries.

The bank and financial services company is based in Winston-Salem, N.C.

MUFG eases

Mitsubishi UFJ Financial’s 3.677% notes due Feb. 22, 2027 eased 2 bps on Thursday to 99 bps bid, a market source said.

The $1 billion tranche of 10-year notes (A1/A/A) priced on Feb. 15 at a Treasuries plus 118 bps spread.

The bank is based in Tokyo.

Citigroup stable

Citigroup’s 4.75% subordinated notes due May 18, 2046 (Baa3/BBB/A-) were unchanged in the secondary market at 163 bps bid, a source said.

The notes were priced on Feb. 7 in a $750 million add-on at a spread of 173 bps over Treasuries.

Citigroup originally sold $1 billion of the notes on May 11, 2016 at a spread of Treasuries plus 225 bps.

The financial services company is based in New York.

Kroger mixed

Kroger’s 2.65% notes due Oct. 15, 2026 firmed about 4 bps to 134 bps bid in the secondary market, a source said on Thursday.

Kroger sold $750 million of the notes on Sept. 26, 2016 at a spread of 110 bps over Treasuries.

The company’s most recent issuance of bonds, the 4.45% notes due Feb. 1, 2047, eased 2 bps to 185 bps bid.

The Cincinnati-based grocery retailer sold $1 billion of the bonds on Jan. 17 at a spread of 150 bps over Treasuries.

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