Morning Commentary: High-grade bonds trade flat to better; Actavis notes firm; Apple steady

By Cristal Cody

Tupelo, Miss., April 7 – High-grade bonds traded mostly flat to slightly better as the deal pipeline geared up with issuers including Monsanto Co., Bank of Montreal and General Motors Financial Co., Inc. expected to tap the market, according to sources early Tuesday.

In the secondary market, Actavis Funding SCS’s senior notes (Baa3/BBB-/BBB-) brought in March remained tight.

Apple Inc.’s 2.5% notes due 2025 were unchanged.

Three-month Libor yield was flat at 27 basis points on Tuesday.

The Markit CDX North American Investment Grade series 23 index ended 1 bp tighter at a spread of 61 bps on Monday.

High-grade trading volume was low at $8.9 billion on Monday following the long holiday weekend, compared to $13.18 billion traded a week earlier on March 30, according to Trace.

Actavis firms

Actavis’ 3.8% notes due 2025 firmed 1 bp to 145 bps offered, a market source said.

The company sold $4 billion of the notes on March 3 at a spread of Treasuries plus 175 bps.

Actavis’ 4.75% notes due 2045 tightened 3 bps to 175 bps offered, the source said.

The company priced $2.25 billion of the bonds in the March 3 offering at Treasuries plus 210 bps.

Actavis is a pharmaceutical company based in Dublin.

Apple unchanged

Apple’s 2.5% notes due 2025 were unchanged at 78 bps offered, according to a market source.

The bonds (Aa1/AA+/) headed out on Monday 2 bps tighter at 84 bps bid, a source said.

Apple sold $1.5 billion of the notes on Feb. 2 at Treasuries plus 85 bps.

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

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