Primary stalls ahead of holiday; FedEx tight; Apple, Cisco firm; credit spreads soften

By Aleesia Forni and Cristal Cody

New York, March 24 – The investment-grade bond primary market was unsurprisingly empty of any new issuance during a shortened session on Thursday.

The quiet trading day closed out an abbreviated week for investment-grade bonds that saw $15.35 billion of new paper price ahead of the extended Easter holiday weekend.

One market source commented that next week’s pace may be lighter compared to recent weeks, with the bulk of supply coming at the front end of the week as issuers get in ahead of Friday’s payrolls data.

Sources are calling for around $15 billion to $20 billion of paper for the week ahead.

Prior to this week, the primary market had seen five straight weeks that hosted more than $25 billion of new high-grade issuance.

“Things are starting to slow a little bit,” he said.

Secondary trading activity was mostly quiet in the high-grade bond market over the short trading day, sources reported on Thursday.

FedEx Corp.’s 3.25% notes due 2026 that priced on Monday remained about 20 basis points better than issuance going out on Thursday.

Newell Rubbermaid Inc.’s 4.2% senior notes due 2026 (Baa3/BBB-/BBB-) sold in the previous week were not seen in secondary trading, a trader said.

Apple Inc.’s 3.25% notes due 2026 that were reopened a week ago tightened 5 bps during the day.

Cisco Systems, Inc.’s 2.95% senior notes due 2026 headed out 4 bps tighter.

The Markit CDX North American Investment Grade index eased 2 bps over the short session to close at a spread of 83 bps.

FedEx holds gains

FedEx’s 3.25% notes due 2026 were seen in secondary trading at 115 bps offered on Thursday, a trader said.

FedEx sold $750 million of the notes (Baa2/BBB) on Monday at a spread of 135 bps over Treasuries.

FedEx is a Memphis, Tenn.-based package and freight transportation company.

Apple improves

Apple’s 3.25% bonds due 2026 tightened 5 bps on Thursday to 101 bps bid, a market source said.

The company sold $1.25 billion of the notes in an add-on on March 17 at Treasuries plus 100 bps.

Apple originally priced $2 billion of the notes on Feb. 16 at 150 bps over Treasuries.

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

Cisco firms

Cisco Systems’ 2.95% notes due 2026 firmed 4 bps in the secondary market to 75 bps bid, according to a market source.

The company sold $750 million of the notes (A1/AA-) on Feb. 22 at 120 bps over Treasuries.

San Jose, Calif.-based Cisco produces internet protocol-based networking and other communications and information technology products.

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