Apple bond guidance levels 10bp-20bp inside IPTs

Tue Apr 29, 2014 12:10pm EDT

NEW YORK, April 29 (IFR) - Technology giant Apple has tightened guidance on its seven-tranche US dollar bond by 10bp to 20bp from initial price talk levels, reflecting strong demand for the deal that was heard to be in excess of US$30bn by midday.

The company looks set to pay little to no new issue concession on the new bonds compared to where its outstanding bonds are trading. With further scope for tightening, the new bonds may even price inside of the existing debt - an outstanding result for the company.

Price guidance on Apple's three-year fixed rate bonds is at Treasuries plus 20bp area (+/- 2bp); 5-year fixed is at plus 40bp area (+/-2.5bp); 7-year fixed is at T+62.5bp area (+/-2.5bp); 10-year fixed is at T+80bp area (+/-3bp); and the 30-year fixed at T+100bp (the number).

Apple's outstanding 2.4% May 2023s are quoted at a G-spread of 75bp, suggesting the new issue concession on the 10-year is around 5bp. The 30-year bonds are offering just 4bp of concession, based on where the outstanding 3.85% May 2043 is trading at Treasuries plus 104bp, while the five-year bonds offer a roughly 1bp concession compared with the outstanding 1% May 2018s trading at a G-spread of 39bp.

Guidance on the two floating-rate notes, with three and five year maturities, is at Libor equivalent.

For related story click on. (Reporting by IFR Credit Team; Editing by Natalie Harrison)