Apple's first bond offering in 2 years headlines busy primary
The offering size was not stated but CreditSights analysts expect it to raise nearly $5 billion to $6 billion, noting that Apple has $8 billion in debt maturing from May through November.
Eight other issuers in the investment-grade primary market are also expected to kick off an unusually active week with estimated total of nearly $35 billion of new debt offerings. These include notes from Comcast, DTE Electric Co and General Motors.
New bond supply is rising as credit spreads, or the premium companies pay over Treasuries, have rebounded in the weeks since U.S. President Donald Trump first announced harsh tariffs and then provided temporary relief.
Many issuers had planned offerings sooner but were thrown off by the uncertainty of Trump's policies. They are rushing to market before the Federal Reserve meets on Wednesday to avoid the typical volatility that immediately follows the Fed chair's comments after such monthly policymaking meetings.
Demand is expected to remain strong as uncertainty pushed investors to look for safety in higher-rated bonds, analysts said.
The issuance rush follows six consecutive weeks of outflows from investment-grade funds, the longest streak since November 2022, noted Dan Krieter, director of fixed income strategy at BMO Capital Markets.
"It's a pretty attractive space to lock in these all-in yields," said Natalie Trevithick, head of investment grade credit strategy at Los Angeles-based asset manager Payden & Rygel.
The average investment-grade bond spread was at 106 basis points on Friday, the latest data shows, or three basis points lower than levels touched the day before.
"The issuance is a lot of high quality names today, (and) a lot of it is just regularly planned issuance. There are probably a couple deals that got pushed back from April," Trevithick noted.
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14 minutes ago
- Business Times
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Sign Up Sign Up These moves represent a broader shift towards viewing the trade relationship through national security lenses, promoted by the China hawks in office. Economic competition is being framed as a matter of strategic rivalry rather than mere trade disputes. Despite the aggressive opening moves, Trump's second term has also demonstrated his willingness to pull back from maximum pressure when it serves his interests. In mid-May, Washington reached an agreement with Beijing to lower tariffs dramatically and open some markets that both sides had closed off as tensions rose. Tariffs on Chinese imports fell to 35 per cent from 145 per cent – a historic level reached in April following retaliatory hikes. That dramatic reduction demonstrated Trump's transactional approach to international relations. The 90-day suspension of the heaviest tariffs has created space for ongoing negotiations, with both sides apparently recognising the economic costs of sustained pressure. 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Business Times
14 minutes ago
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Business Times
an hour ago
- Business Times
EU's Trump tariff deal breakthrough
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Sign Up Sign Up So the deal not only falls well short of the comprehensive liberalisation the European Commission and some previous US administrations have advocated, but it is also higher than the 10 per cent reciprocal tariff that the UK agreed with Trump. This, potentially, gives UK exports to the US a competitive advantage over the EU. However, the 15 per cent reciprocal rate is the same as that of Japan. It is also less than the 19 per cent agreed by Indonesia and the Philippines with the US, and Vietnam's 20 per cent rate. On top of the tariff rate, the EU has agreed to buy around US$750 billion of US energy over the next three years. This is expected to be largely liquefied natural gas (LNG), with some oil and nuclear fuels. Should the deal hold, this energy purchase will be divided over equal US$250 billion tranches. Following Russia's invasion of Ukraine in 2022, the US is already the EU's second-largest supplier of LNG. The energy agenda could be a win-win for both sides. Reiterating the EU's desire to end its reliance on Russian fossil fuels, Dr von der Leyen said on Sunday: '(There is) too much Russian energy entering the EU through the back door... So it is very welcome to purchase more affordable and better energy from the United States.' Yet, despite this positivity from the European Commission's president, the framework deal may be fragile. There is much more negotiation to be done on both the reciprocal and separate sectoral tariffs agenda before potential finalisation. At the same time, American courts are continuing to look into whether Trump has the presidential authority to initiate across-the-board US reciprocal and sectoral tariffs under the pretext of a national emergency. This coming week, for instance, a US federal appeals court will hear arguments in a closely watched lawsuit on this issue. On the upside for the EU, the deal secured zero-for-zero tariffs on a number of products, including all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain natural resources and critical raw materials. The goal is to keep adding more products to this list. However, there are other examples where US sectoral tariffs could end up higher than 15 per cent. Pharmaceuticals are one such instance, as Trump had previously threatened sectoral tariffs of up to 200 per cent. Dr von der Leyen said: 'It is agreed that we have 15 per cent for pharmaceuticals. Whatever the decisions later on is of the president of the United States: how to deal with pharmaceuticals in general? Globally, that's on a different sheet of paper.' On Sunday, Trump told reporters: 'We have to have them built and made in the United States, and we want them made in the United States. Pharmaceuticals are very special. We can't be in a position where we're relying on other countries.' Steel and aluminium also remain a key point of contention, as Trump intends to exempt them from the reciprocal deal and maintain 50 per cent tariffs. In contrast, Dr von der Leyen has stated that the goal is to return to 'historical quota levels, similar to what was agreed with the UK', which would 'help ring-fence our industries and address global overcapacity'. So the framework agreement is far from perfect, despite the fact that a 15 per cent reciprocal tariff is lower than 30 per cent threatened by Trump. Dr von der Leyen acknowledged the 'challenge for some sectors', but argued it secures crucial access to the US market. She also highlighted her broader trade diversification agenda, citing recently concluded negotiations with the Mercosur bloc, Mexico and Indonesia as part of a push to expand beyond the EU's 76 existing trade partnerships. Nevertheless, for all the deal's flaws, it avoids – at least temporarily – worst-case scenarios between the EU and US, which could have potentially seen a trade war. Since last November, Europe had been bracing for a tsunami of troubles from Trump. This January, Trump said: 'We have a US$350 billion deficit with the EU. They treat us very, very badly, so they're going to be in for tariffs.' As tensions mounted recently, the European Commission had prepared several lists of retaliatory measures against US products worth around 93 billion euros. Moreover, the deal may now help expand cooperation outside of economics, including in consolidating Western support for Ukraine. This could be critical for the future of Kyiv as it faces another difficult period in the war with Moscow. Taken together, the agreement will avert a trade war, but it remains fragile and much negotiation remains. If the agreement holds in coming years, it is another signal that the long era of expansion of international trade as a share of global GDP is probably now at an end, with Trump's disruptive tariff agenda reshaping the global political economy. The writer is an associate at LSE IDEAS at London School of Economics
