Strong high-grade deal volume forecast; AT&T tightens; Apple flat to better; Microsoft firms

By Cristal Cody

Tupelo, Miss., Feb. 3 – Investment-grade primary action quieted on Friday after a week that included new bond deals from Microsoft Corp., AT&T Inc. and Apple Inc.

Just those three companies brought $37 billion of high-grade bonds to market.

Looking ahead to new supply, Symantec Corp. is offering $1 billion of split-rated eight-year senior notes (Baa3/BB+/BB+) in a deal contingent on closing an acquisition of Lifelock, Inc. BofA Merrill Lynch and J.P. Morgan Securities LLC are the lead managers of the Rule 144A and Regulation S transaction.

Market tone ended the week strong and sources expect about $20 billion to $30 billion of new issuance in the week ahead.

New high-grade bonds mostly tightened in the secondary market.

AT&T’s bonds (Baa1/BBB+/A-) were as much as 13 basis points better than issuance on Friday.

Apple’s notes (Aa1/AA+/) traded flat to about 5 bps tighter across the nine tranches the company priced on Thursday.

Microsoft’s notes (Aaa/AAA/) firmed about 3 bps to 12 bps across the seven tranches it priced on Monday.

Credit spreads improved over Friday’s session after staying mostly flat over the week. The Markit CDX North American Investment Grade index firmed 2 bps to end at a spread of 64 bps.

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