Light high-grade supply forecast; FirstEnergy notes tighten; Reckitt mixed; Whole Foods firms

By Cristal Cody

Tupelo, Miss., June 23 – High-grade bond market action slowed on Friday with light deal volume forecast for the rest of the month.

Syndicate sources expect about $15 billion of supply in the upcoming week.

More than $18 billion of bonds priced over the week, including a $140 million offering of 5% five-year senior notes announced on Friday by Corporate Capital Trust, Inc.

In the secondary market, FirstEnergy Corp.’s $3 billion of senior notes (Baa3/BB+/BBB-) that priced in three tranches on Monday were ending the week about 5 basis points to 10 bps tighter in the secondary market.

Reckitt Benckiser Treasury Services plc’s $7.75 billion of senior notes (A3/A-/) sold on Wednesday were mixed but mostly traded wrapped around issuance early Friday.

Also in secondary trading on Friday, Whole Foods Market Inc.’s 5.2% notes due Dec. 3, 2025 tightened about 10 bps.

Kroger Co.’s senior notes (Baa1/BBB/BBB) traded 1 bp to 2 bps softer during the session.

The Markit CDX North American Investment Grade index firmed about 1 bp to a spread of 60 bps.

FirstEnergy tightens

FirstEnergy’s 2.85% notes due July 15, 2022 traded on Friday at 99 bps bid, 96 bps offered, according to a market source.

The company priced $500 million of the five-year notes on Monday at a spread of Treasuries plus 110 bps.

FirstEnergy’s 3.9% notes due July 15, 2027 were quoted at 165 bps bid, 163 bps offered in the secondary market.

The 10-year notes priced in a $1.5 billion tranche on Monday at a Treasuries plus 175 bps spread.

The diversified energy holding company is based in Akron, Ohio.

Reckitt mixed

Reckitt Benckiser Treasury Services’ $750 million of five-year floating-rate notes, priced at par to yield Libor plus 56 bps on Wednesday, traded early Friday at 53 bps bid, 51 bps offered, a market source said.

Reckitt Benckiser’s 2.375% fixed-rate notes due June 24, 2022 were flat at 62 bps bid, 60 bps offered.

The company sold $2.5 billion of the notes at a spread of Treasuries plus 62 bps.

The tranche of 3% notes due June 26, 2027 were quoted on Friday at 87 bps bid, 84 bps offered in secondary trading.

Reckitt Benckiser Treasury Services placed $2.5 billion of the 10-year notes at a spread of 87 bps over Treasuries.

The notes are guaranteed by parent company Reckitt Benckiser Group plc, a Slough, England-based consumer goods company.

Whole Foods firms

Whole Foods Market’s 5.2% notes due Dec. 3, 2025 (Baa3/BBB-/) tightened about 10 bps to 95 bps bid on Friday, according to a market source.

The company’s bonds came in about 85 bps a week earlier 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 eases

Kroger’s 2.65% notes due Oct. 15, 2026 softened about 1 bp to 137 bps bid, according to a market source.

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

The company’s 4.45% notes due Feb. 1, 2047 eased 2 bps to 187 bps bid in secondary trading during the session.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.