Morning Commentary: Shell’s new notes trade better than issuance; Apple bonds mostly unchanged

By Cristal Cody

Tupelo, Miss., May 8 – New investment-grade bonds brought over the week traded mostly better as market participants focused on economic data early Friday.

The Labor Department announced that non-farm payroll employment rose 223,000 in April, below the 228,000 forecast. The unemployment rate fell as expected to 5.4% from 5.5%.

In the secondary market, Shell International Finance BV’s $10 billion six-part offering of senior notes (A1/AA/) that priced on Wednesday traded mostly tighter than issuance.

Apple Inc.’s $8 billion seven-part offering of senior notes (Aa1/AA+/) that priced on Wednesday traded mostly unchanged to about 1 basis point better than pricing.

The Markit CDX North American Investment Grade series 23 index was flat at a spread of 66 bps.

The three-month Libor yield was unchanged at 28 bps.

Shell improves

Shell International Finance’s 3.25% notes due 2025 were quoted tighter than issuance at 97 bps offered, a market source said.

The company sold $2.75 billion of the notes on Wednesday at Treasuries plus 105 bps.

Shell’s 4.125% notes due 2035, printed in a $1.5 billion offering at Treasuries plus 120 bps, traded about 1 bp better than pricing at 119 bps offered.

The $3 billion tranche of 4.375% notes due 2045, sold at Treasuries plus 140 bps, were quoted in secondary trading at 138 bps offered.

The company is a subsidiary of the Hague, Netherlands-based Royal Dutch Shell plc.

Apple steady

Apple’s 2% notes due 2020 traded 1 bp better than issuance at 44 bps offered, a source said.

The company sold $1.25 billion of the five-year notes at Treasuries plus 45 bps on Wednesday.

Apple’s $2 billion tranche of 4.375% notes due 2045, priced at Treasuries plus 140 bps, firmed 1 bp to 139 bps offered.

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

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