By Patrick McGee
Investors thirsty for high-grade bonds had ample opportunity
Monday from Anheuser-Busch InBev NV (BUD) and four other
borrowers.
The beer maker sold $4 billion worth of bonds in a four-pack
featuring three-, five-, 10-, and 30-year maturities. The deal
formed the bulk of a $9.25 billion session for high-grade debt
sales Monday, indicating broad support for new deals even after $42
billion worth was priced last week in the second-busiest week on
record, per Dealogic.
Syndicate desks arranging new deals are expecting more than $20
billion to price this week.
The Inbev bonds ranged in yield from 0.802% to 4.028%,
reflecting narrow risk premiums to Treasurys of between 0.43
percentage point and 1.0 percentage points.
The single-A-range-rated jumbo deal is one of the largest this
month, and InBev is no stranger to big offerings. It sold $7.5
billion in July to finance its acquisition of Mexican brewer Grupo
Modelo.
Investors have been eager to purchase high-grade bonds this
month to capture higher yields than Treasurys but maintain a high
degree of safety. Higher rates provide better protection against
the threat of rising interest rates.
USAA Investments says it has cut back on equities and bulked up
on high-grade bonds in anticipation of market turbulence as
politicians fight over U.S. borrowing limits.
"We hold a higher-than-normal allocation in fixed-income
securities-primarily in corporate bonds-as a defensive position as
we move through the debates in Washington," the firm said in a note
Monday.
Monday's bonds were placed despite an index of bond-buyer
confidence waning 2.6%, according to Markit.
National Australia Bank Limited (NAB.AU) saw so much demand for
its two-part offering of double-A rated bonds that it added a third
tranche of two-year floating-rate notes. The three-part deal
totaled $2.5 billion, with three- and 10-year notes yielding 0.97%
and 3.022%.
Among other deals, Penske Truck Leasing Co. borrowed $1 billion
in five- and 10-year bonds, yielding 2.918% and 4.357%,
respectively.
Write to Patrick McGee at patrick.mcgee@dowjones.com
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