Week’s high-grade bond supply meets estimates; primary slowdown ahead; Apple, AT&T tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 14 – Issuers weathered volatile market conditions this week to bring roughly $25.1 billion of new investment-grade bond issuance to the primary.

The week closed on Friday with no new deals pricing, keeping the week’s total in line with what was predicted to be a $25 billion week.

Meantime, Lipper reported outflows of $1.84 billion from corporate investment-grade funds this week, bringing the year-to-date inflows to $26.2 billion.

This follows last week’s outflows of $740 million.

Primary activity is expected to slow in the coming sessions, with around $10 billion of supply expected for the week ahead.

In the secondary market, Apple Inc.’s bonds (Aa1/AA+) traded 3 bps to 4 bps tighter on Friday.

Oracle Corp.’s senior notes (A1/AA-/A+) were mixed.

AT&T Inc.’s bonds (/BBB+/A-) headed out about 1 bp to 5 bps better in secondary trading.

Time Warner Inc.’s bonds (Baa2/BBB) improved about 1 bp during the session.

The Markit CDX North American Investment Grade index ended unchanged at a spread of 77 bps.

U.S. credit indices remain weak, Barclays Bank plc analysts said in a market note on Friday.

“Investment grade spreads have continued to widen amid generally benign U.S. economic data, negative macro news out of emerging markets, and an extremely active primary issuance market and are now 39 [bps] off of year-to-date tights,” the note said.

Apple firms

Apple’s 3.2% notes due 2025 were quoted 4 bps better in late afternoon trading at 113 bps bid, according to a market source.

The company sold $2 billion of the 10-year notes on May 6 at a spread of Treasuries plus 100 bps.

Apple’s 4.375% notes due 2045 traded 3 bps better at 154 bps bid on Friday.

The company sold $2 billion of the bonds in the May 6 offering at 140 bps over Treasuries.

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

Oracle mixed

Oracle’s 2.95% notes due 2025 firmed 3 bps to 131 bps bid in secondary trading, a source said.

Oracle sold $2.5 billion of the notes on April 28 at 100 bps over Treasuries.

The company’s 4.125% bonds due 2045 headed out 6 bps weaker at 159 bps bid.

Oracle sold $2 billion of the bonds in the April 28 offering at Treasuries plus 145 bps.

The computer software and technology company is based in Redwood City, Calif.

AT&T improves

AT&T’s 3.4% notes due 2025 firmed about 1 bp to 195 bps bid on Friday, a market source said.

The company sold $5 billion of the notes on April 23 at a spread of Treasuries plus 150 bps.

AT&T’s 4.75% bonds due 2046 tightened 5 bps in trading to 249 bps bid.

AT&T sold $3.5 billion of the bonds in the April 23 offering at Treasuries plus 215 bps.

The telecommunications company is based in Dallas.

Time Warner firms

Time Warner’s 3.6% notes due 2025 firmed 1 bp to 187 bps bid, according to a market source on Friday.

The company sold $1.5 billion of the notes on May 28 at a spread of Treasuries plus 150 bps.

Time Warner’s 4.85% debentures due 2045 were seen 1 bp tighter at 224 bps bid.

The debentures priced in a $600 million tranche in the May 28 offering at Treasuries plus 195 bps.

Time Warner is a New York-based media company.

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