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By Shankar Ramakrishnan

NEW YORK, April 29 (IFR) - Investors rushed on Tuesday to get a piece of Apple's new US$12bn seven-part bond deal, just the company's second foray into the US bond market.

More than US$40bn of orders were heard to have poured into the trade at midday, though sources said final books were closer to US$35bn as spread levels tightened during bookbuilding.

Apple, which had initially been targeting US$8bn-US$10bn, will price the trade later on Tuesday.

The strong demand for double A rated company's offering has allowed the deal to price inside its outstanding bonds, which is a market coup for the technology giant.

While other issuance in euros and sterling could come later, only the US dollar-denominated deal was in the market on Tuesday, led by Deutsche Bank and Goldman Sachs.

Investors told IFR that the company had indicated it will not issue in dollars again this year, which also helped boost demand.

"The market is in a great shape and they could have done more than the USD17bn they raised last year, but then they might have to pay up," one banker told IFR.

"They are not trying to do a Verizon here," he said, referring to the hefty price that company paid for its mammoth USD49bn bond issue last year.

"They don't seem to want to do that."

Apple is selling three-, five-, seven- and 10-year fixed rate notes along with three- and five-year floaters.

With demand heavy across all tranches, the leads tightened price guidance on the deal from 10bp to 20bp.

Price guidance on Apple's three-year fixed rate bonds was at Treasuries plus 20bp area (+/- 2bp); 5-year fixed is at plus 40bp area (+/-2.5bp); 7-year fixed is at T+62.5bp area (+/-2.5bp); 10-year fixed is at T+80bp area (+/-3bp); and the 30-year fixed at T+100bp (the number).

These levels were tightened further at launch. The spread on the US$1.5bn three-year fixed rate tranche was set at Treasuries plus 18bp while US$1bn in three-year floaters pay Libor plus 7bp.

The US$2bn five-year fixed rate bonds launched at Treasuries plus 37.5bp, with US$1bn in five-year floaters at Libor plus 30bp. The seven-year tranche was sized at US$3bn at a spread of Treasuries plus 60bp, while the US$2.5bn 10-year bonds came at plus 77bp and the US$1bn 30-year at plus 100bp.

Apple's outstanding 2.4% May 2023s are quoted at a G-spread of 75bp, suggesting the new issue concession on the 10-year is around 2bp. The 30-year bonds are offering just 4bp of concession, based on where the outstanding 3.85% May 2043 is trading at Treasuries plus 104bp, while the five-year bonds offer a roughly negative 1.5bp concession compared with the outstanding 1% May 2018s trading at a G-spread of 39bp.