Morning Commentary: High-grade primary market action set; Apple notes soften modestly

By Cristal Cody

Tupelo, Miss., Feb. 6 – Monday opened to announcements of at least three new investment-grade bond deals in the works.

Estee Lauder Cos. Inc. is preparing to bring three tranches of senior notes to the primary market.

Discover Financial Services is selling senior notes via four bookrunners.

Also, GATX Corp. plans to price 10-year senior notes.

Market sources expect about $20 billion to $30 billion of high-grade bond supply for the week.

Apple Inc.’s three-year fixed- and floating-rate notes (Aa1/AA+) that priced on Thursday traded about 1 basis point softer from where they were seen in secondary trading on Friday.

On Friday, $16.6 billion of investment-grade issues were traded following heavy secondary volume over the week.

The three-month Libor yield was stable at 1.03% on Monday, according to a market source.

Apple eases

Apple’s 1.9% notes due Feb. 7, 2020 eased about 1 bp from Friday to 44 bps bid, according to a market source. The notes were seen trading on Friday at 43 bps bid, 41 bps offered.

The $1 billion tranche of three-year notes priced on Thursday at a spread of Treasuries plus 45 bps.

Apple’s floating-rate notes due Feb. 7, 2020 traded about 1 bp softer at 16 bps offered. The notes were quoted on Friday at 17 bps bid, 15 bps offered.

Apple priced $500 million of the floating-rate notes at par to yield Libor plus 20 bps.

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

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