Morning Commentary: Investment-grade credit spreads hold tight; Apple bonds firm in trade

By Cristal Cody

Tupelo, Miss., Feb. 9 – High-grade credit spreads and corporate bonds remained mostly tight early Monday following more than $50 billion of issuance in the previous week, market sources said.

“Corporations have finally started coming to the markets with the issuance that we’ve been waiting for,” RBC Capital Markets LLC analysts said in a note. “Last week saw over $50 [billion] in issuance, and spreads remained in a very tight range.

“As earnings season ramps up, we could see issuance take a pause before really picking up toward the end of the month.”

In the secondary market, Apple Inc.’s 2.5% senior notes due 2025 that priced a week ago traded nearly 10 basis points better than issuance, a source said.

The Markit CDX North American Investment Grade index closed unchanged on Friday at a spread of 66 bps.

Apple strong

Apple’s 2.5% notes due 2025 tightened to 74 bps offered, a market source said early Monday.

Apple sold $1.5 billion of the 10-year notes (Aa1/AA+/) on Feb. 2 at a spread of Treasuries plus 85 bps.

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

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