Morning Commentary: High-grade deal action thins; Whole Foods softens before earnings release

By Cristal Cody

Tupelo, Miss., July 26 – Activity in the high-grade bond market thinned on Wednesday as investors and traders await the Federal Reserve’s monetary policy announcement later in the day.

No issuers were reported in the deal pipeline at the start of the day.

More than $7 billion of bonds priced in the first two sessions of the week.

About $20 billion to $25 billion of total issuance volume is expected by syndicate sources over the week.

Corporate earnings reports also have impacted market activity over the week. Whole Foods Market Inc. will release its third-quarter earnings report after the market closes on Wednesday.

In the secondary market early in the day, Whole Foods Market’s 5.2% notes due Dec. 3, 2025 traded modestly weaker at 114.18 from 114.38 on Tuesday, a market source said.

The notes (Baa3/BBB-) have climbed about 7 points since June 16 when 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 99.861 to yield 5.218% and a spread of Treasuries plus 300 basis points.

Overall investment-grade secondary trading volume climbed to $19.2 billion on Tuesday from $13.3 billion on Monday, according to Trace.

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