High-grade supply heavy; Apple, Starbucks, Amgen, Marsh in primary; spreads mostly flat

By Cristal Cody

Tupelo, Miss., May 4 – The high-grade primary market kicked into high gear at the start of the week with issuers including Apple Inc., Starbucks Corp., Altria Group Inc. and Amgen Inc. marketing bonds on Monday.

Kraft Heinz Foods Co. priced $3.5 billion of senior notes (Baa3/BB+/BB+) in three tranches in an offering upsized from $1.5 billion.

Marsh & McLennan Cos., Inc. sold $750 million of long 10-year senior notes in a deal upsized from $600 million.

Apple offered four tranches of notes (Aa1/AA+/) that includes three-year notes with initial talk in the Treasuries plus 95 basis points area, five-year notes talked at the 110 bps spread area, 20-year notes talked at the 130 bps spread area and 30-year notes talked at the 170 bps over Treasuries area.

Starbucks marketed three tranches of senior notes (Baa1/BBB+/BBB+) on Monday. Initial price talk on a two-year note is at the Treasuries plus 160 bps area, while a tranche of long 10-year notes is talked at the 220 bps spread area and long 30-year notes are talked to print at the 250 bps spread area.

Altria marketed three tranches of senior notes (A3/BBB/) that includes five-year notes with initial guidance in the Treasuries plus 245 bps area, 10-year notes talked at the 320 bps spread area and 30-year notes talked at the 360 bps spread area.

Amgen planned to price new and reopened senior notes (Baa1/A-/) in four parts on Monday. The company expects to price an add-on to its 2.2% notes due Feb. 21, 2027 that are initially talked to price at the Treasuries plus 165 bps area, new notes due Feb. 25, 2031 talked at the 185 bps spread area, an add-on to its 3.15% notes due Feb. 21, 2040 at the 190 bps spread area and a tap of its 3.375% notes due Feb. 21, 2025 that are talked at the 200 bps spread area.

Also on Monday, Oneok Inc. marketed three tranches of senior notes (Baa3/BBB/) with initial talk on six-, 11- and 31- year notes at the 637.5 bps over Treasuries area.

Whirlpool Corp. offered new 30-year notes (Baa1/BBB/BBB) with initial guidance in the Treasuries plus 387.5 bps area.

New York Life Global Funding also offered new three-year funding agreements-backed notes (Aaa/AA+/AAA) with initial price talk at the 120 bps over Treasuries area.

Investment-grade supply is forecast to total in the $60 billion to $75 billion area this week following nearly $90 billion of issuance last week.

About $250 billion to $300 billion of volume is expected by market participants in May with some calling for as little as $150 billion of issuance.

Market tone was mixed on Monday.

The Markit CDX North American Investment Grade 33 index softened modestly to a spread of 90.48 bps from 90.18 bps on Friday.

The iShares iBoxx Investment Grade Corporate Bond ETF ended up 0.16% at 128.54 after closing Friday down 0.15%.

The PIMCO Investment Grade Corporate Bond index finished up 0.18% at 109.62 after it closed off 0.36% on Friday.

Marsh & McLennan upsizes

Marsh & McLennan priced an upsized $750 million of 2.25% senior notes due Nov. 15, 2030 (Baa1/A-/) on Monday at 99.146 to yield 2.342% and a spread of 170 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

Initial price talk was at the Treasuries plus 205 bps area.

The deal was upsized from $600 million.

BofA Securities, Inc., Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and TD Securities (USA) LLC were the bookrunners.

The professional services firm is based in New York.

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