Morning Commentary: Anheuser-Busch notes firm in early trading; credit spreads open stronger

By Cristal Cody

Tupelo, Miss., Feb. 10 – High-grade bonds were mixed in early secondary trading on Wednesday with market participants focused on Federal Reserve chairman Janet Yellen’s Congressional testimony expected later in the day, sources said.

Anheuser-Busch InBev Finance Inc.’s senior notes (A2/A-) improved about 3 basis points to 4 bps from Tuesday.

High-grade credit spreads were better at the start of the session. The Markit CDX North American Investment Grade index opened about 5 bps tighter at a spread of 116 bps.

The three-month Libor yield was unchanged early Wednesday at 62 bps.

Secondary trading volume climbed to $16.15 billion on Tuesday, up from nearly $11 billion of investment-grade bonds traded on Monday, according to Trace.

Anheuser-Busch tightens

Anheuser-Busch’s 3.65% notes due 2026 traded about 3 bps tighter at 164 bps offered early Wednesday, according to a market source.

The company sold $11 billion of the notes on Jan. 13 at a spread of Treasuries plus 160 bps.

Anheuser-Busch’s 4.9% notes due 2046 firmed 4 bps to 197 bps offered in secondary trading.

The notes were sold in an $11 billion tranche in the Jan. 13 sale at Treasuries plus 205 bps.

The brewery is based in Leuven, Belgium.

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