Microsoft stole the limelight in the US corporate bond market on Monday, with a deal that could reach US$14bn in size.
The software giant, rated Aaa/AAA/AA+, announced a seven-part bond deal with three, five, seven, 10, 20, 30 and 40-year tranches.
Bankers said they expected each tranche to be around US$2bn in size. That would push January issuance to US$158.633bn, making it the second most active month on record, according to IFR data.
This doesn't include other deals from USAA Capital Corp and Crowncastle International, which were also in the market on Monday.
"Everyone is going to have eyes on Microsoft," said a banker away from the deal. "It will set the tone for the week."
Initial price thoughts on the Microsoft offering were between T+60bp and T+155bp across the seven tranches.
Investors said those levels looked cheap, although they expected the issuer to tighten spreads significantly through bookbuild.
"It's priced cheap for the credit rating, even if it does go to double-A in the medium term," said one investor.