Morning Commentary: Apple offers nine tranches of notes; new Microsoft, AT&T paper improves

By Cristal Cody

Tupelo, Miss., Feb. 2 – Apple Inc. is in the high-grade deal pipeline with a nine-tranche offering of notes.

Apple’s offering includes three tranches of floating-rate notes and six tranches of fixed-rate notes.

The week has seen the largest deal priced year to date. Microsoft Corp. sold $17 billion of notes in seven tranches on Monday. Also, on Tuesday AT&T Inc. priced a $10 billion six-tranche global notes offering.

In other expected supply, Johnson Controls International plc plans to price 30-year notes.

Microsoft’s new notes (Aaa/AAA) traded higher as the market opened on Thursday.

AT&T’s notes (Baa1/BBB+/A-) were modestly better in early secondary trading.

Secondary market volume totaled $21.63 billion in the investment-grade market on Wednesday, down from a record $28.15 billion of issues traded on Tuesday, according to Trace.

Microsoft stronger

Microsoft’s 3.3% notes due Feb. 6, 2027 edged up to 100.86 at the start of secondary trading on Thursday from where the bonds last traded on Wednesday at 100.11, according to a market source.

The company sold $4 billion of the notes on Monday at 99.645 to yield 3.342%, or 85 basis points over Treasuries.

The tranche of 4.1% notes due Feb. 6, 2037 continued to trade stronger and was up to 102.38 in early secondary trading. The bonds last traded on Wednesday at 101.93.

Microsoft sold $2.5 billion of the 20-year notes on Monday at 99.783 to yield 3.342%, or Treasuries plus 100 bps.

Microsoft’s 4.25% notes due Feb. 6, 2047 rose to 101.93 in early secondary trading from closing at 101.26 in the previous session.

The bonds were sold in a $3 billion tranche on Monday at 99.731 to yield 4.266%, or Treasuries plus 115 bps.

The computer software company is based in Redmond, Wash.

AT&T trades up

AT&T’s 4.25% notes due March 1, 2027 rose to 100.82 over the morning from 100.67 on Wednesday afternoon, a market source said.

AT&T priced $2 billion of the 10-year notes on Tuesday at 99.94 and a spread of Treasuries plus 180 bps.

The tranche of 5.45% notes due March 1, 2046 was slightly higher at 100.92 over the morning from 100.79 in trading in the previous session.

The $2 billion tranche priced at 99.439, or Treasuries plus 240 bps, on Tuesday.

AT&T is a Dallas-based telecommunications company.

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