Even corporate bond yields are feeling the heat from Amazon.com Inc.’s shakeup of the U.S grocery sector.
The online retailing giant’s pledge to slash prices at newly acquired Whole Foods Market Inc. has pushed up borrowing costs across the board for U.S. food retailers. The yield on a Bank of America Merrill Lynch Index of U.S. grocery companies jumped 11 basis points last week to the highest in more than a month
The moves underscore both Amazon’s massive influence on retail markets and the fragility of a sector known for razor-thin profit margins. The company cut prices by as much as 43 percent on a broad cross section of Whole Foods groceries Monday, its first day as the owner of the chain following the $13.7 billion acquisition.
Here are some of the bonds that were worst hit by the news:
- The Fresh Market Inc.’s $800 million of bonds due 2023 slumped 3.13 cents on the dollar last week to a record low of 77.89 cents
- The yield on Albertsons Cos. Inc.’s $1.2 billion of bonds due in 2025 jumped 28 basis points to 7.32 percent
- The yield on B&G Foods Inc.’s $500 million of bonds due in 2025 climbed 4 basis points to 4.7 percent
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