Morning Commentary: Apple notes improve in secondary market; Microsoft mixed; AT&T better

By Cristal Cody

Tupelo, Miss., Feb. 3 – New high-grade bonds priced over the week traded mostly better in the secondary market early Friday.

Apple Inc.’s notes (Aa1/AA+) that priced on Thursday were stronger.

Microsoft Corp.’s notes (Aaa/AAA) were mixed in early secondary trading.

AT&T Inc.’s bonds (Baa1/BBB+/A-) improved.

Secondary trading has been heavy over the week. On Thursday, $22.46 billion of investment-grade issues were traded, compared to $21.63 billion on Wednesday and a record $28.15 billion on Tuesday, according to Trace.

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

Apple improves

Apple’s 3.5% notes due Feb. 9, 2027 traded better early Friday at 100.86 in the secondary market, a source said.

The company sold $2.25 billion of the notes on Thursday at par, or Treasuries plus 88 basis points.

Apple’s 4.25% notes due Feb. 9, 2047 were up to 100.94 over the morning.

The bonds priced on Thursday in a $1 billion tranche at 99.798 to yield 4.262%, or Treasuries plus 115 bps.

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

Microsoft mixed

Microsoft’s 3.3% notes due Feb. 6, 2027 slipped to 100.73 early Friday from where the bonds last traded at 101.03 on Thursday, according to a market source.

The company sold $4 billion of the notes on Monday at 99.645 to yield 3.342% and a spread of 85 bps over Treasuries.

Microsoft’s 4.25% notes due Feb. 6, 2047 traded at 101.92 late morning on Friday, up from 101.57 in late trading on Thursday.

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 better

AT&T’s 4.25% notes due March 1, 2027 climbed to 101.40 in early secondary trading on Friday from where the notes last traded in the previous session at 100.54, 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 company’s 5.45% notes due March 1, 2046 rose to 100.96 early Friday after trading flat on Thursday at 100.11.

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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