Morning Commentary: Apple bonds strong; FedEx stable; high-grade credit spreads open flat

By Cristal Cody

Eureka Springs, Ark., March 28 – Investment-grade corporate bonds traded mostly flat to modestly better early Monday after the U.S. market reopened following the long Good Friday holiday weekend.

Several markets, including the European and Hong Kong markets, are closed for the Easter Monday holiday.

Apple Inc.’s bonds, which were brought in a $12 billion nine-tranche offering in February, remain strong in secondary trading. The company’s long bonds traded 4 basis points better early Monday and more than 50 bps tighter than issuance.

FedEx Corp.’s 4.55% bonds due 2046 were active but unchanged.

The Markit CDX North American Investment Grade index opened flat at a spread of 83 bps.

The three-month Libor yield was stable at the start of the day at 63 bps.

Apple stronger

Apple’s 4.65% bonds due 2046 were seen 4 bps tighter at 152 bps offered in secondary trading, a source said.

Apple sold $2.5 billion of the bonds (Aa1/AA+) on Feb. 16 at a spread of Treasuries plus 205 bps.

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

FedEx unchanged

FedEx’s 4.55% bonds due 2046 traded flat early Monday at 182 bps offered, according to a market source.

FedEx sold $1.25 billion of the bonds (Baa2/BBB) on March 21 at 185 bps over Treasuries.

The package and freight transportation company is based in Memphis, Tenn.

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