Morning Commentary: Microsoft bonds tighten; Citigroup paper firms in early secondary trade

By Cristal Cody

Tupelo, Miss., Nov. 2 – High-grade bonds traded mostly better in the secondary market at the start of the session on Monday.

Microsoft Corp.’s $13 billion seven-part offering of senior notes (Aaa/AAA/AA+) that priced on Thursday tightened about 2 basis points to 15 bps.

Citigroup Inc.’s 4.45% subordinated notes due 2027 traded 2 bps tighter early Monday.

The Markit CDX North American Investment Grade 25 index opened the day mostly unchanged at a spread of 79 bps.

Microsoft’s 2% notes due 2020 firmed to 48 bps offered in the secondary market, a source said.

The company sold $2.25 billion of the notes on Thursday at a spread of Treasuries plus 50 bps.

Microsoft’s tranche of 3.125% notes due 2025 tightened to 83 bps offered, better than where the notes priced in a $3 billion slice at Treasuries plus 95 bps.

The company’s $3 billion offering of 4.45% bonds due 2045, which priced at Treasuries plus 150 bps on Thursday, firmed to 141 bps offered in secondary trading early Monday.

The computer software company is based in Redmond, Wash.

Citigroup firms

Citigroup’s 4.45% notes due 2027 were quoted 2 bps tighter in secondary trading at the start of Monday’s session, a source said.

The paper headed out on Friday unchanged at 233 bps bid.

Citigroup sold $1.5 billion of the notes (Baa3/ BBB+/A-) in a reopening on Oct. 23 at a spread of 233 bps over Treasuries. The issue originally priced in a $2 billion offering on Sept. 23 at Treasuries plus 235 bps.

The financial services company is based in New York.

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