High-grade primary market quiet; Amazon.com flat; Whole Foods softens; Kroger improves

By Cristal Cody

Tupelo, Miss., Aug. 24 – High-grade issuers stayed to the sidelines on Thursday with no reported bond offerings brought to the primary market.

Week to date, corporate and SSA issuers have priced about $13.55 billion of bonds, coming in higher than the $5 billion to $10 billion of supply market sources expected.

Primary action is expected to remain thin until after the Labor Day holiday.

The Markit CDX North American Investment Grade index closed about 1 basis point better at a spread of 60 bps.

In the secondary market on Thursday, Amazon.com, Inc.’s notes (Baa1/AA-/) priced in a $16 billion seven-tranche deal on Aug. 15 were mostly flat.

Amazon.com announced in June it plans to purchase Whole Foods Market Inc. for $13.7 billion in cash.

Whole Foods’ 5.2% notes due Dec. 3, 2025 traded nearly 10 bps softer on Thursday. On Wednesday, the company received approval of its deal with Amazon.com from shareholders and the Federal Trade Commission.

Kroger Co.’s 3.7% notes due 2027 priced in July were better on the day but remain softer than issuance.

Amazon.com steady

Amazon.com’s 3.15% notes due Aug. 22, 2027 traded on Thursday flat at 87 bps bid, according to a market source.

Amazon.com sold $3.5 billion of the notes on Aug. 15 at a spread of Treasuries plus 90 bps.

The online commerce company is based in Seattle.

Whole Foods eases

Whole Foods Market’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) were quoted weaker on the day at 86 bps bid from 77 bps bid in the previous session, a source said.

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

The organic and natural foods grocery retailer is based in Austin, Texas.

Kroger firms

Kroger’s 3.7% notes due 2027 tightened about 3 bps to 148 bps bid in secondary trading on Thursday, a market source said.

The company sold $600 million of the notes (Baa1/BBB/BBB) on July 17 at a Treasuries plus 140 bps spread.

Kroger is a Cincinnati-based grocery retailer.

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