Morning Commentary: FOMC main focus; Apple notes tighten; Citigroup paper mostly flat

By Cristal Cody

Tupelo, Miss., June 18 – Light investment-grade issuance was expected on Wednesday with most market activity focused on the Federal Reserve’s Federal Open Market Committee announcement scheduled for later in the session, sources said.

Spreads remained flat over the morning, a market source said.

The Markit CDX North American Investment Grade series 22 index closed unchanged on Tuesday at a spread of 60 basis points.

In the secondary market, Apple Inc.’s notes (Aa1/AA+/) were active and traded about 3 bps tighter, according to a market source.

Citigroup Inc.’s 3.75% notes due 2024 traded flat to 1 bp tighter, a source said.

Apple firms

Apple’s 3.45% notes due 2024 (Aa1/AA+/) firmed 3 bps to 75 bps bid, a market source said.

The notes edged up to 100.43 in early trading from 100.37 on Tuesday, according to a market source.

Apple sold $2.5 billion of the 10-year notes at a spread of Treasuries plus 77 bps, or 99.916 to yield 3.46%, on April 29.

The computer and mobile communications device company is based in Cupertino, Calif.

Citi improves

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) were mostly unchanged to 1 bp tighter at 114 bps offered, a source said.

The notes were quoted slightly lower at 99.61 over the morning from 99.64 on Tuesday, according to a market source.

Citigroup sold $1.25 billion of the 10-year notes on June 9 at 99.876 to yield 3.765%, or a spread of Treasuries plus 115 bps.

The bank is based in New York.

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