Morning Commentary: Ameren Illinois bonds firm; McDonald’s softens; credit spreads ease

By Cristal Cody

Tupelo, Miss., Dec. 8 – High-grade bonds were mixed in early secondary trading on Tuesday, while credit spreads opened the session 2 basis points wider.

Ameren Illinois Co.’s new 4.15% senior secured notes due 2046 that priced on Monday traded about 2 bps tighter in the secondary market.

McDonald’s Corp.’s 4.7% senior notes due 2035 were quoted about 5 bps wider.

The Markit CDX North American Investment Grade 25 index opened the session 2 bps wider at a spread of 85 bps.

The investment-grade CDX index has ranged from a low spread of 60.7 bps to a high spread of 94.8 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

The three-month Libor yield was unchanged at 46 bps at the start of the day.

Ameren Illinois firms

Ameren Illinois’ 4.15% senior secured notes due 2046 were quoted about 2 bps tighter at 123 bps offered early Tuesday, according to a market source.

The company sold $250 million of the bonds (A1/A/A) on Monday at a spread of Treasuries plus 125 bps.

Ameren Illinois is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

McDonald’s eases

McDonald’s 4.7% bonds due 2035 traded about 5 bps wider at 171 bps offered in secondary trading, a market source said.

The company sold $750 million of the bonds (Baa1/BBB+/BBB+) at Treasuries plus 180 bps on Wednesday as part of a $6 billion five-part offering of notes.

The fast food chain is based in Oak Brook, Ill.

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