Apple Inc. and General Motors Co. are selling bonds Monday, testing the investment grade debt market. Their borrowings will be a barometer of investors’ appetite for bonds from companies with profits under pressure from President Donald Trump’s tariff offensive.
The iPhone maker is issuing US$4.5 billion of investment-grade debt in four parts, according to a person familiar with the matter. The deal’s longest portion, a 10-year note, is set to yield half of a percentage point above Treasuries, said the person, who asked not to be identified as the details are private. Initial discussions called for a yield in the area of 0.7 percentage point above the benchmark.
GM is offering $2 billion in bonds, with the longest portion of the offering, a $500m 10-year note, set to yield 1.95 percentage point over Treasuries, according to a person familiar with the matter.
The two companies are coming to the market after quarterly-earnings reports that fed fears of escalating costs from levies. Apple on Thursday warned that tariffs will increase costs by about $900 million this quarter. GM cut its full-year profit outlook last week, just days after initially suspending its earnings guidance for 2025.
Where the bonds finally price and how strong demand is will be one of the first real indications of what investors are willing to buy after Trump’s trade policies sowed confusion across markets.
Already, some analysts are recommending not purchasing Apple’s bonds. “We don’t think this offering looks very attractive given the tariff headwinds and significant uncertainty associated with those,” CreditSights Inc. analysts Jordan Chalfin and Michael Pugh wrote in a note Monday.
Market Restart
Both deals are the first for the respective holding companies in at least two years. Apple last issued in 2023 and GM the year prior to that, although GM’s financing arm is a frequent seller of bonds.
Companies, along with the people who buy and sell their debt, are looking to take advantage of market calm while they can. Corporations are forecasted to sell around $1.5 trillion of high-grade bonds in the U.S. this year. Timing those sales has gotten harder than it’s been in years as markets swing on the policy about-faces from the Trump administration.
However, there have been signs of capital markets opening up again in recent days. In the U.S. leveraged loan market, seven loans have launched since the start of last week. A handful of deals have launched in junk bonds, including two from mortgage lender PennyMac Financial Services.
Nine borrowers, including Apple and GM, are looking to sell $14.45 billion in high-grade bonds on Monday. Bankers expect as much as $40 billion in sales in that market this week, with industrial and technology firms like Apple potentially accounting for the bulk of issuance. Much of the week’s supply will likely be sold in the next few days, ahead of the Federal Reserve’s rate decision on Wednesday.
Ethan M Steinberg and Josyana Joshua, Bloomberg News
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