Morning Commentary: High-grade bonds modestly tighter; McDonald’s improves; Visa firms

By Cristal Cody

Tupelo, Miss., Jan. 4 – High-grade bonds traded modestly tighter early Monday as the market kicked off the first trading day of 2016.

McDonald’s Corp.’s senior notes (Baa1/BBB+/BBB+) that priced in December were active in secondary trading and remain better than issuance.

Visa Inc.’s new 3.15% senior notes due 2025 traded 1 basis point tighter.

The Markit CDX North American Investment Grade 25 index opened the session at a spread of 91.5 bps.

The three-month Libor yield was at 61 bps early Monday.

McDonald’s stronger

McDonald’s 4.7% bonds due 2035 were quoted at 165 bps offered in the secondary market early Monday, according to a source.

The company sold $750 million of the bonds at Treasuries plus 180 bps on Dec. 2.

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

Visa notes improve

Visa’s 3.15% notes due 2025 traded 1 bp tighter at 84 bps offered, according to a market source.

The company sold $4 billion of the notes (A1/A+) on Dec. 9 at a spread of Treasuries plus 97 bps.

The retail electronic payments network operator is based in San Francisco.

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