Yields Jump After Apple Announces Another Massive 4-Tranche Buyback-Funding Bond Offering

After a subdued overnight session, where investors flows were directed toward the bond complex and out of risk assets, moments ago we saw a sharp steepening move in Treasury yields across the curve, with 10Y and 30Y yields moving higher by 3-4bps.

The reason: a flurry of rate locks because at around 8:20am dealers announced that Apple was in the market with another massive multi-tranche bond offering joining Monday’s “burgeoning” IG credit issuance slate.

As Bloomberg reported, Apple’s offering includes 3Y, 5Y, 10Y and 30Y tranches, and will be used to fund the company’s newly announced $50 billion stock buyback expansion; additionally, continuing the record flood of bond issuance, Amgen and Starbucks also have slated issuance for Monday, with IG issuers are expected to raise $70b this week.

As a result, around 30k Jun20 TY contracts changed hand from 8:20am to 8:25am, highest volumes of the session, in move from 139-02 down to 138-28+ lows; 10-year yields moved up to 0.63%, ~2bp cheaper on the day, leaving 2s10s steeper with front-end yields little changed.