Morning Commentary: McDonald’s bonds remain tight; Microsoft’s notes firm; credit spreads flat

By Cristal Cody

Tupelo, Miss., Dec. 4 – McDonald’s Corp.’s $6 billion five-part issue of senior notes (Baa1/BBB+/BBB+) that priced on Wednesday remained mostly tight in secondary trading early Friday.

Microsoft Corp.’s 4.45% senior notes due 2045 traded about 3 basis points better at the start of the session.

The three-month Libor yield rose 2 bps on Friday to 44 bps.

The Markit CDX North American Investment Grade 25 index opened the day mostly unchanged at a spread of 84 bps.

McDonald’s strong

McDonald’s 2.75% notes due 2020 were quoted tight at 101 bps offered in the secondary market, a source said.

The company sold $1 billion of the five-year notes on Wednesday at a spread of 115 bps over Treasuries.

McDonald’s 3.7% notes due 2026 traded at 142 bps offered early Friday, better than where the notes priced on Wednesday in a $1.75 billion tranche at Treasuries plus 155 bps.

The fast food chain is based in Oak Brook, Ill.

Microsoft improves

Microsoft’s 4.45% bonds due 2045 traded about 3 bps tighter at 124 bps offered in secondary trading, according to a market source.

Microsoft sold $3 billion of the bonds (Aaa/AAA/AA+) on Oct. 29 at Treasuries plus 150 bps.

The computer software company is based in Redmond, Wash.

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