Morning Commentary: National Rural Utilities plans to sell bonds; Microsoft notes trade better

By Cristal Cody

Tupelo, Miss., Jan. 31 – Investment-grade market action opened Tuesday mostly quiet after Microsoft Corp.’s $17 billion seven-tranche offering of notes priced on Monday as the largest deal of the year to date.

National Rural Utilities Cooperative Finance Corp. is in the deal pipeline with an offering of collateral trust bonds.

Also, Seagate Technology plc plans to price senior notes in a Rule 144A- and Regulation S-eligible private placement.

The three-month Libor yield was unchanged at 1.04% on Tuesday, according to a market source.

Microsoft’s bonds traded better in the secondary market early Tuesday.

On Monday, $17.5 billion of investment-grade issues were traded, according to Trace. Of the 5,763 bonds traded, 2,393 advanced and 3,135 declined.

Microsoft improves

Microsoft’s 3.3% notes due Feb. 6, 2027 traded better at 100.05 early Tuesday, according to a market source.

The company sold $4 billion of the notes on Monday at 99.645 to yield 3.342%, or 85 basis points over Treasuries.

The tranche of 4.1% notes due Feb. 6, 2037 was stronger at 101.35 in early secondary trading.

Microsoft sold the $2.5 billion offering of 20-year notes at 99.783 to yield 3.342%, or Treasuries plus 100 bps.

Microsoft’s 4.25% notes due Feb. 6, 2047 rose to 100.30 over the morning.

The long bonds were sold in a $3 billion tranche on Monday at 99.731 to yield 4.266%, or Treasuries plus 115 bps.

The computer software company is based in Redmond, Wash.

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