Microsoft megadeal leads $19.4 billion day; Pepsi firms; Coca-Cola softens; JPMorgan eases

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 29 – Issuers piled into the investment-grade primary during Thursday’s session, led by a $13 billion megadeal from Microsoft Corp. that helped push the week’s total supply to more than $35 billion.

The rush of new deals followed a Wednesday session that was empty in light of the conclusion of the Federal Reserve’s two-day policy meeting and its ultimate decision to hold interest rates steady at the near-zero level.

Microsoft sold the behemoth bond in seven parts in a trade that garnered more than $30 billion of orders, a market source said.

Mead Johnson Nutrition Co. was also in the primary, offering two tranches of notes in a $1.5 billion sale that ratcheted in spreads between 30 basis points and 35 bps from initial price thoughts.

Also pricing new deals during the $19.4 billion trading day were Norfolk Southern Corp., Morgan Stanley, American Express Credit Corp., Dr. Pepper Snapple Group Inc. and Dover Corp.

Bonds were mixed in secondary trading on Thursday.

PepsiCo Inc.’s 4.45% senior notes due 2046 firmed 2 bps.

Coca-Cola Co.’s 2.875% senior notes due 2025 traded 5 bps wider over the day.

JPMorgan Chase & Co.’s 2.55% senior notes due 2020 eased 3 bps.

Credit spreads gave back Wednesday’s 1 bp gain. The Markit CDX North American Investment Grade 25 index eased 1 bp on Thursday to close at a spread of 79 bps.

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