Coca-Cola, Export Development tap market; Microsoft firms; McDonald’s, AT&T notes widen

By Cristal Cody

Tupelo, Miss., Oct. 22 – The Coca-Cola Co. and Export Development Canada were among investment-grade issuers that tapped the market on Thursday, bringing the week’s supply to about $19.5 billion.

Coca-Cola sold $4 billion of senior fixed-rate notes due 2017, 2020 and 2025 (Aa3/AA/A+) during the session.

Export Development Canada brought a $1 billion U.S. dollar-denominated offering of three-year bonds.

JPMorgan Chase & Co. also planned to price a two-part offering of fixed- and floating-rate notes.

Market tone was “pretty good” over the day for new issues, a syndicate source said.

High-grade issuers are expected to take a break on Friday, according to a market source.

In the secondary market, investment-grade bonds were mixed, while credit spreads headed out tighter.

Microsoft Corp.’s bonds (Aaa/AAA/) tightened modestly in secondary trading before the company’s aftermarket release of fiscal first-quarter results.

McDonald’s Corp.’s senior notes (A3/A-/BBB+) widened 4 bps to 8 bps in secondary trading after the company reported strong third-quarter profit. The company’s stock hit an all-time high at 111.00 on Thursday and closed up 8.33, or 8.12%, at 110.87.

AT&T Inc.’s bonds (/BBB+/A-) headed out 4 bps weaker ahead of the company’s third-quarter earnings release after the bell closed.

The Markit CDX North American Investment Grade 25 index firmed 2 bps on Thursday to close at a spread of 80 bps.

Coca-Cola taps market

Coca-Cola priced $750 million of 0.875% two-year notes at 99.956 to yield 0.897% and a spread of 30 bps over Treasuries in Thursday’s offering, a source said.

The company sold the $1.5 billion tranche of 1.875% five-year notes at 99.824 to yield 1.912% and with a spread of 57 bps over Treasuries.

Coca-Cola also priced $1.75 billion of 2.875% 10-year notes at 99.845 to yield 1.893%. The notes priced with a spread of 87 bps over Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds from the deal will be used for general corporate purposes.

Coca-Cola is an Atlanta-based beverage company.

EDC prices $1 billion

Export Development Canada was in the primary market with $1 billion of 1% three-year bonds priced at 99.795 to yield 1.07%, according to an FWP filing with the Securities and Exchange Commission.

The bonds due Nov. 1, 2018 (Aaa/AAA) priced at a spread of 18.15 bps over Treasuries.

BNP Paribas Securities Corp., Daiwa Bank AG, London Branch, Deutsche Bank Securities Inc. and Scotia Capital (USA) Inc. were the bookrunners.

Proceeds from the deal will be used for general corporate purposes.

Export Development Canada is an Ottawa-based government-backed agency for exporters.

Microsoft trades better

Microsoft’s 2.7% notes due 2025 tightened 5 bps on Thursday to 70 bps bid in secondary trading on Thursday, according to a market source.

Microsoft sold $2.25 billion of the notes on Feb. 9, 2015 at a spread of Treasuries plus 75 bps.

The company’s tranche of 4% bonds due 2055 firmed 2 bps to 153 bps bid, the source said.

Microsoft sold $2.25 billion of the bonds in the February sale at 153 bps over Treasuries.

The computer software company is based in Redmond, Wash.

McDonald’s widens

McDonald’s 2.2% notes due 2020 eased 4 bps to 95 bps bid during the session, a market source said.

The company sold $700 million of the notes on May 18 at Treasuries plus 70 bps.

McDonald’s 4.6% notes due 2045 widened 8 bps to 186 bps bid.

The long bonds priced in a $600 million tranche in the May 18 sale at Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

AT&T softens

AT&T’s 3.4% notes due 2025 traded 4 bps wider on Thursday at 177 bps bid, a market source said.

The company sold $5 billion of the notes on April 23 at a spread of 150 bps over Treasuries.

AT&T’s 4.75% bonds due 2046 eased 4 bps to 231 bps bid.

AT&T sold $3.5 billion of the bonds in the April 23 offering at 215 bps over Treasuries.

The telecommunications company is based in Dallas.

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