Apple upsizes; Capital One brings deal; Apple, Citigroup steady; Goldman firms

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 2 – The investment-grade bond market kicked off the new month on a positive note on Monday, with Apple Inc. and Capital One pricing new deals during the session.

Apple came to market with an upsized $6.5 billion offering of notes sold in five tranches.

The deal’s initial size was set at $5 billion at its announcement.

Also on Monday, Capital One Financial Corp. and Capital One NA issued $3 billion of bonds in three parts, all at the tight end of price talk.

A source noted that the deal’s orderbook was nearly two times oversubscribed.

In forward calendar news, Oesterreichische Kontrollbank AG, Japan Bank for International Cooperation and European Investment Bank announced plans to price bonds later this week.

With $9.5 billion of supply priced during the first session of the week, the primary is on pace to reach expectations of $25 billion to $30 billion of new issuance this week.

High-grade corporate bonds traded mostly flat to tighter over the session, sources said.

The Markit CDX North American Investment Grade index firmed 2 basis points to a spread of 69 bps.

Apple’s existing bonds traded mostly unchanged in the secondary market.

Goldman Sachs Group Inc.’s 3.85% notes due 2024 tightened about 4 bps to start the week.

Citigroup Inc.’s 3.75% notes due 2024 were flat.

Apple upsizes

Apple sold an upsized $6.5 billion five-part offering of senior notes (Aa1/AA+/) on Monday, according to a source away from the trade.

There was a $500 million of five-year floaters priced at Libor plus 25 bps.

The company also priced $1.25 billion of 1.55% five-year fixed-rate notes at 42 bps over Treasuries.

Pricing was at the tight end of talk, which was set in the 45 bps area over Treasuries.

A third tranche was $1.25 billion of 2.15% seven-year notes sold at 67 bps over Treasuries. The notes sold at the tight end of the Treasuries plus 70 bps area talk.

A $1.5 billion tranche of 2.5% 10-year notes sold at 85 bps over Treasuries. Pricing was in line with talk.

Finally, $2 billion of 3.45% 30-year bonds sold at 125 bps over Treasuries. The notes priced at the tight end of the Treasuries plus 125 bps to 128 bps talk.

Goldman Sachs & Co. and Deutsche Bank Securities Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes.

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

Capital One offering

Capital One Financial Corp. and Capital One NA sold $3 billion of notes in three parts during Monday’s session, according to a market source.

Capital One NA sold $400 million of three-year floating-rate senior bank notes (A3/BBB+/A-) at par to yield Libor plus 68 bps and also priced $1.6 billion of 1.65% three-year senior bank notes at 99.98 to yield 1.657%, or Treasuries plus 90 bps.

The fixed-rate notes sold at the tight end of price talk.

Meanwhile, Capital One Financial sold $1 billion of 3.2% 10-year senior HoldCo notes at 99.754 to yield 3.229%, or Treasuries plus 157 bps.

The notes sold at the tight end of talk.

Bookrunners were Barclays, Deutsche Bank Securities, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Capital One.

Proceeds will be used for general corporate purposes.

The financial services company is based in McLean, Va.

EIB sets talk

The European Investment Bank set price talk for a planned offering of 10-year notes (Aaa/AAA/AAA) in the area of mid-swaps plus 5 bps, according to a market source.

Barclays, Deutsche Bank and JPMorgan are running the books.

The lender for the European Union is based in Kirchberg, Luxembourg.

JBIC on deck

Japan Bank for International Cooperation is planning to sell a $1 billion offering of guaranteed bonds (Aa3/AA-/) due 2025, according to a market source and a 424B5 filed with the Securities and Exchange Commission.

Price guidance is set in the mid-swaps plus high-30 bps area.

The notes will be guaranteed by Japan.

BNP Paribas Securities Corp., BofA Merrill Lynch, Daiwa Capital Markets Europe and Nomura are the joint bookrunners.

Proceeds will be used for the bank’s financing operations.

The financial institution is based in Tokyo.

OeKB five-year notes

Oesterreichische Kontrollbank AG announced a benchmark offering of five-year notes on Monday, a market source said.

The notes (Aaa/AA+/) are talked in the mid-swaps plus 3 bps area.

Deutsche Bank Securities, Goldman Sachs and HSBC are the bookrunners.

The export and financial services company for Austrian businesses is based in Vienna.

Apple steady

Apple’s 3.45% notes due 2024 (Aa1/AA+/) traded unchanged at 73 bps offered, according to a market source.

Apple priced $2.5 billion of the notes on April 29, 2014 at Treasuries plus 77 bps.

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

Goldman firms

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) were quoted about 4 bps tighter at 146 bps bid, a source said.

Goldman Sachs sold $2.25 billion of the notes on June 30, 2014 at a spread of Treasuries plus 135 bps.

The financial services company is based in New York City.

Citigroup stable

Citigroup’s 3.75% notes due 2024 (Baa2/A-/A) headed out unchanged at 142 bps bid, a market source said.

The bank sold $1.25 billion of the notes on June 9, 2014 at Treasuries plus 115 bps.

Citigroup is based in New York City.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices were unchanged on Thursday, according to a market source.

Bank of America Corp.’s CDS costs were flat at 71 bps bid, 74 bps offered. Citigroup’s CDS costs were also unchanged at 82 bps bid, 87 bps offered. JPMorgan Chase & Co.’s CDS costs remained at 71 bps bid, 74 bps offered. Wells Fargo & Co.’s CDS costs were flat at 51 bps bid, 54 bps offered.

Merrill Lynch’s CDS costs were flat at 73 bps bid, 76 bps offered. Morgan Stanley’s CDS costs were also flat at 80 bps bid, 85 bps offered. Goldman Sachs Group’s CDS costs were unchanged at 92 bps bid, 95 bps offered.

Paul Deckelman contributed to this review.

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