Strong high-grade deal volume forecast; AT&T tightens; Apple flat to better; Microsoft firms

By Cristal Cody

Tupelo, Miss., Feb. 3 – Investment-grade primary action quieted on Friday after a week that included new bond deals from Microsoft Corp., AT&T Inc. and Apple Inc.

Just those three companies brought $37 billion of high-grade bonds to market.

Looking ahead to new supply, Symantec Corp. is offering $1 billion of split-rated eight-year senior notes (Baa3/BB+/BB+) in a deal contingent on closing an acquisition of Lifelock, Inc. BofA Merrill Lynch and J.P. Morgan Securities LLC are the lead managers of the Rule 144A and Regulation S transaction.

Market tone ended the week strong and sources expect about $20 billion to $30 billion of new issuance in the week ahead.

New high-grade bonds mostly tightened in the secondary market.

AT&T’s bonds (Baa1/BBB+/A-) were as much as 13 basis points better than issuance on Friday.

Apple’s notes (Aa1/AA+/) traded flat to about 5 bps tighter across the nine tranches the company priced on Thursday.

Microsoft’s notes (Aaa/AAA/) firmed about 3 bps to 12 bps across the seven tranches it priced on Monday.

Credit spreads improved over Friday’s session after staying mostly flat over the week. The Markit CDX North American Investment Grade index firmed 2 bps to end at a spread of 64 bps.

AT&T firms

AT&T’s 4.25% notes due March 1, 2027 tightened to 170 bps bid, 168 bps offered in secondary trading, a source said on Friday.

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

The company’s 5.45% notes due March 1, 2046 traded in to 229 bps bid, 226 bps offered.

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

AT&T is a Dallas-based telecommunications company.

Apple mostly better

Apple’s 2.5% notes due Feb. 9, 2022 were quoted in secondary trading on Friday at 58 bps bid, 56 bps offered, a source said.

The notes priced on Thursday in a $1.5 billion tranche at a spread of Treasuries plus 58 bps.

Apple’s 3.5% notes due Feb. 9, 2027 were quoted tighter at 83 bps bid, 81 bps offered.

The company sold $2.25 billion of the notes on Thursday at Treasuries plus 88 bps.

Apple’s 4.25% notes due Feb. 9, 2047 improved to 111 bps bid, 109 bps offered in secondary trading.

The bonds priced on Thursday in a $1 billion tranche at Treasuries plus 115 bps.

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

Microsoft tightens

Microsoft’s 3.3% notes due Feb. 6, 2027 were better than issuance on Friday at 77 bps bid, 75 bps offered, according to a market source.

The company sold $4 billion of the notes on Monday at a spread of 85 bps over Treasuries.

Microsoft’s 4.25% notes due Feb. 6, 2047 traded at 106 bps bid, 104 bps offered during the session.

The bonds were sold in a $3 billion tranche on Monday at Treasuries plus 115 bps.

The computer software company is based in Redmond, Wash.

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