Apple does $12 billion megadeal; Deutsche Bank paper tightens

By Aleesia Forni and Cristal Cody

New York, Feb. 16 – Apple Inc. and Comcast Corp. sold bonds on Tuesday, reopening the high-grade primary market following the extended Presidents Day holiday weekend.

Apple’s $12 billion megadeal sold in nine tranches, with all pieces of the deal selling between 10 basis points to 15 bps inside initial price thoughts.

And Comcast sold both tranches of its $2.25 billion new issue tight of price talk.

The session also saw Federal Home Loan Banks prep a $5 billion offering notes in two parts expected to price during Wednesday’s session.

Elsewhere in the primary, International Business Machines Corp. announced plans to price an offering of senior notes.

Deutsche Bank AG’s paper (A3/BBB+/A) continued to tighten in the secondary market on Tuesday and traded about 20 bps better over the day.

The bank announced a tender offer on Friday to purchase €3 billion of euro-denominated notes and $2 billion of dollar-denominated senior notes.

The Markit CDX North American Investment Grade index ended the day 1 bps tighter at a spread of 121 bps.

Apple megadeal

In the primary market on Tuesday, Apple sold a $12 billion nine-part offering of senior notes (Aa1/AA+), according to an informed source.

The company’s sale included $500 million of 1.3% two-year notes sold at Treasuries plus 60 basis points.

A $3 billion 1.7% three-year tranche sold at 80 bps over Treasuries. A $500 million three-year floater sold at par to yield Libor plus 82 bps.

And $2.25 billion of 2.25% five-year notes priced with a 105 bps spread over Treasuries.

There was a $500 million five-year floater sold at par to yield Libor plus 113 bps.

Apple priced $1.5 billion of 2.85% seven-year green bonds at 135 bps over Treasuries.

A $2 billion 3.25% 10-year tranche sold at 150 bps over Treasuries.

The company issued $1.25 billion of 4.5% 20-year bonds with a spread of Treasuries plus 190 bps.

Finally, $2.5 billion of 4.65% 30-year bonds sold at Treasuries plus 205 bps.

All tranches sold on top of guidance and inside initial price thoughts.

Goldman Sachs & Co., BofA Merrill Lynch, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes, including repurchases of common stock and payment of dividends under the company’s recently expanded program to return capital to shareholders, funding for working capital, capital expenditures and acquisitions and repayment of debt.

The company plans to use proceeds from the green bonds due 2023 for the investment in eligible projects to reduce the company’s impact on climate change, pioneer the use of greener materials in products and processes and conserve precious resources.

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

Comcast two-parter

Comcast Corp. sold $2.25 billion of senior notes (A3/A/A-) in two tranches on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

A $750 million tranche of 2.75% notes due March 1, 2023 sold at 99.847 to yield 2.774%, or Treasuries plus 125 bps.

The notes sold tight of talk.

Also, $1.5 billion of 3.15% notes due March 1, 2026 priced at 99.362 to yield 3.172% with a spread of Treasuries plus 140 bps. Pricing came inside talk.

Proceeds will be used for working capital and general corporate purposes.

Comcast is a Philadelphia-based provider of entertainment, information and communication products and services.

IBM offering

International Business Machines announced plans to price an offering of senior notes, according to a 424B3 filed with the Securities and Exchange Commission.

Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the bookrunners.

Proceeds will be used for general corporate purposes.

The information technology and computer company is based in Armonk, N.Y.

FHLB on deck

And Federal Home Loan Banks is planning to sell a $5 billion offering of two-year and five-year Global Notes on Wednesday, according to a company news release.

The offering includes $3 billion of notes due March 19, 2018.

Lead managers are Barclays, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC. Seven co-managers and a distribution group will complete the syndication team.

Also, there is a $2 billion offering of notes due Feb. 18, 2021.

Lead managers are Barclays, Deutsche Bank Securities Inc. and TD Securities (USA) LLC. Seven co-managers and a distribution group will complete the syndication team.

FHLBanks are 12 government-sponsored funding providers.

Deutsche Bank stronger

Deutsche Bank’s 3.125% notes due 2021 traded at 270 bps bid, 265 bps offered in the secondary market on Tuesday, a trader said.

The bank sold $1 billion of the five-year notes on Jan. 8 at Treasuries plus 157 bps.

Deutsche Bank’s 4.1% notes due 2026 tightened to 288 bps offered over the day, the trader said. The notes were seen on Friday at 315 bps bid, 305 bps offered.

Deutsche Bank sold $750 million of the notes in the Jan. 8 offering at a spread of Treasuries plus 200 bps.

The bank is based in Frankfurt.

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