High-grade corporates quiet; British American Tobacco sees ‘decent’ trading; Amazon.com flat

By Cristal Cody

Tupelo, Miss., Aug. 31 – Issuance in the investment-grade corporate bond market remained quiet on Thursday.

“Was very quiet, expect it to be dead tomorrow,” one source said.

The bond markets will not close early on Friday but will be closed on Monday for the Labor Day holiday.

The Markit CDX North American Investment Grade index tightened more than 1 basis point to close at a spread of 58 bps.

The new 3.557% senior notes due Aug. 15, 2027 that British American Tobacco plc subsidiary BAT Capital Corp. priced as part of a $17.25 billion deal earlier in the month were active in secondary trading at the start of the session.

“Looks like decent TRACE activity, large blocks trading 124/123,” a source said.

British American Tobacco announced the closing of its $49 billion acquisition of Reynolds American Inc. in July.

Amazon.com, Inc.’s 3.15% notes due Aug. 22, 2027, priced in another major bond offering in August, were flat on the day. The company closed Monday on its $13.7 billion cash acquisition of Whole Foods Markets Inc.

BAT Capital notes active

British American Tobacco’s 3.557% senior notes due Aug. 15, 2027 (Baa2/BBB+/) traded very early Thursday at 123 bps offered, a market source said.

Subsidiary BAT Capital priced $3.5 billion of the notes on Aug. 8 at a Treasuries plus 130 bps spread.

The international tobacco company is based in London.

Amazon.com flat

Amazon.com’s 3.15% notes due Aug. 22, 2027 were unchanged at 83 bps bid on Thursday, according to a market source.

The Seattle-based online commerce company sold $3.5 billion of the notes (Baa1/AA-/) on Aug. 15 as part of a $16 billion seven-tranche offering at a spread of Treasuries plus 90 bps.

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