Apple was back in the investment-grade bond market on Thursday with plans to increase the size of three outstanding U.S. dollar bonds in order to return capital to its shareholders.
The tech giant is tapping its 2.25 percent 2021 bonds, its 3.25 percent 2026s and its 4.65 percent 2046s. Lead managers Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and Deutsche Bank plan to price the deal later on Thursday.
One trader said he expected Apple to raise at least U.S.$2.25 billion. Initial whispers are T+70 basis point area on the 2021s, T+110 basis point area on the 2026s, and T+165 basis point to 170 basis point area on the 2046s.
Those levels offer a new issue concession of about 15 basis points to 20 basis points over where the bonds are currently trading.
Apple, rated Aa1/AA+, raised U.S. $12 billion just a month ago in the bond market, including its first Green bond. It was one of the first borrowers to tap the market after volatility prompted a temporary lull in supply.
That deal, which priced on February 16, offered juicier concessions of 15 basis points to 24 basis points — the highest Apple has ever paid — and received overwhelming demand of around U.S. $30 billion from the buyside.
Apple is one of 10 high-grade issuers in the primary market on Thursday, and that number could still grow.
The surge of deal announcements follows a strong rally in credit spreads after the U.S. Federal Reserve kept rates on hold and signaled fewer rate hikes this year.
On Thursday, the CDX IG 25 index was a touch tighter at 85.75 basis points, according to Tradeweb.
Other borrowers looking to price bonds include insurer American International Group, which is also quickly back to the market after pricing a U.S. $1.5 billion five-year deal on February 23.
“The market is that much better after being ugly (at the beginning of the year),” said one syndicate banker on AIG’s rapid return to the market. “If the window is there you take it.”