Primary pauses for FOMC; Oracle, AT&T mixed; Verizon weak

By Aleesia Forni and Cristal Cody

Virginia Beach, June 17 – The investment-grade primary took a pause on Wednesday, as the market focused on the release of the Federal Reserve’s statement following its two-day Federal Open Market Committee meeting.

The Fed said that U.S. economic activity has been expanding moderately following little change during the first quarter and will likely warrant a rate hike by the end of this year.

In total, this week has hosted roughly $9.1 billion of new investment-grade issuance.

Primary activity is expected to pick up in the day ahead, with a “very busy” Thursday session expected, one market source said.

Investment-grade corporate bonds and credit spreads were mostly weak over the trading session on Wednesday, sources said.

Oracle Corp.’s senior notes (A1/AA-/A+) were mixed in afternoon trading before the release of the company’s fourth-quarter earnings report.

Apple Inc.’s bonds (Aa1/AA+/) traded 2 bps to 3 bps weaker.

Microsoft Corp.’s 2.7% notes due 2025 widened 3 bps.

AT&T Inc.’s bonds (/BBB+/A-) were mixed with the short-dated notes mostly tighter.

Verizon Communications Inc.’s 3.5% notes due 2024 widened 10 bps over the day.

The Markit CDX North American Investment Grade series 23 index eased 1 basis point to a spread of 70 bps.

Oracle mixed

Oracle’s 2.95% notes due 2025 firmed 5 bps to 107 bps bid in the secondary market, a source said.

Oracle sold $2.5 billion of the notes on April 28 at Treasuries plus 100 bps.

The company’s 4.125% bonds due 2045 widened 7 bps to 149 bps offered.

Oracle sold $2 billion of the bonds at Treasuries plus 145 bps in the April 28 offering.

The computer software and technology company is based in Redwood City, Calif.

Apple soft

Apple’s 3.2% notes due 2025 eased 3 bps to 93 bps bid, a market source said.

The company sold $2 billion of the 10-year notes on May 6 at Treasuries plus 100 bps.

Apple’s 4.375% notes due 2045 traded 2 bps weaker at 137 bps bid.

The company sold $2 billion of the bonds in the May 6 sale at Treasuries plus 140 bps.

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

Microsoft eases

Microsoft’s 2.7% notes due 2025 eased 3 bps to 84 bps bid in secondary trading, a source said.

Microsoft sold $2.25 billion of the notes (Aaa/AAA/) on Feb. 9 at 75 bps over Treasuries.

The computer software company is based in Redmond, Wash.

AT&T mixed

AT&T’s 3.4% notes due 2025 firmed 3 bps to 171 bps bid on Wednesday, according to a market source.

The company sold $5 billion of the notes on April 23 at a spread of Treasuries plus 150 bps.

AT&T’s 4.75% bonds due 2046 eased 4 bps to 225 bps bid.

AT&T sold $3.5 billion of the bonds in the April 23 offering at Treasuries plus 215 bps.

The telecommunications company is based in Dallas.

Verizon widens

Verizon’s 3.5% notes due 2024 widened to 155 bps bid on Wednesday from 145 bps bid in the previous session, a source said.

The company sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22, 2014 at a spread of Treasuries plus 135 bps.

The telecommunications company is based in New York City.

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