American Campus upsizes; UDR, AEP Texas price notes; Disney tightens; credit spreads firm

By Aleesia Forni and Cristal Cody

Virginia Beach, Sept. 15 – American Campus Communities Operating Partnership LP, UDR Inc. and AEP Texas Central Co. priced smaller-sized bond deals during the quiet Tuesday session ahead of the Federal Reserve’s two-day policy meeting.

American Campus upsized its new deal to $400 million, pricing the deal around 15 basis points tighter than initial price thoughts.

UDR sold a $300 million issue of 10-year notes at the tight end of guidance, and AEP Texas Central sold $250 million of 10-year notes.

In forward calendar news, Bridge Bancorp Inc. announced a two-part fixed-to-floating-rate subordinated offering of notes slated for this week’s business.

Primary action is expected to remain subdued in light of the Federal Open Market Committee meeting on both Wednesday and Thursday, though one source noted the possibility of a rare Friday deal following the rate decision.

Secondary market activity was “slow but not as slow as I thought it would be,” a trader said on Tuesday.

New investment-grade bonds continue to trade mostly tighter in the secondary market.

Walt Disney Co.’s senior notes (A2/ A/A) that priced on Monday traded about 1 bp to 4 bps tighter on the bid side.

Earlier in the day, bonds from St. Jude Medical, Inc. and Biogen Inc. were quoted stronger in secondary trading.

The Markit CDX North American Investment Grade index firmed 1 bp over the session to a spread of 79 bps.

The high-grade CDX index has ranged from a low spread of 60.4 bps to a high spread of 87.9 bps over the past 12 months, according to a Barclays Bank plc report on Tuesday.

American Campus upsizes

American Campus Communities was in the market Tuesday with an upsized $400 million offering of 3.35% five-year senior notes (Baa3/BBB-) sold with a spread of Treasuries plus 180 bps, according to a market source and an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.811 to yield 3.391%.

The notes sold at the tight end of guidance set in the 180 bps to 185 bps range over Treasuries following initial talk set in the 195 bps area over Treasuries.

Bookrunners are Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BofA Merrill Lynch and U.S. Bancorp Investments Inc.

The deal’s size was increased from $300 million.

Proceeds will be used to repay the outstanding balance of a revolving credit facility, to fund the current development pipeline and potential acquisitions of student housing properties and for general business purposes.

The notes are guaranteed by American Campus Communities Inc.

The real estate investment trust for student housing is based in Austin, Texas.

UDR new issue

Meantime, UDR priced a $300 million offering of 4% 10-year notes on Tuesday at Treasuries plus 177 bps, at the tight end of guidance set in the 180 bps area over Treasuries, according to an informed source and an FWP filing with the SEC.

Initially, talk was in the Treasuries plus 200 bps area.

The notes (Baa1/BBB+) sold at 99.77 to yield 4.028%.

JPMorgan, Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo are the joint bookrunners.

Proceeds will be used to repay the company’s outstanding debt under its $900 million unsecured credit facility and for general corporate purposes.

The real estate investment trust for apartment communities is based in Highlands Ranch, Colo.

AEP Texas prices tight

AEP Texas Central issued $250 million of 3.85% 10-year notes on Tuesday at the tight end of guidance with a spread of 170 bps over Treasuries, a market source said.

The offering priced at 99.021 to yield 3.969% via BofA Merrill Lynch and SunTrust Robinson Humphrey Inc.

The subsidiary of Columbus, Ohio-based electricity provider American Electric Power plans to use the proceeds for general corporate purposes.

Bridge eyes debt offering

Bridge Bancorp announced plans on Tuesday to price fixed-to-floating rate subordinated debentures (Kroll: BBB-) in two tranches this week, according to an FWP filed with the SEC.

The offering includes a tranche of debentures due September 2025, which will be non-callable for five years, and a tranche due September 2030, which will be non-callable for 10 years.

The company plans to use the proceeds of the offering for general corporate purposes, potential strategic acquisitions and investments in its subsidiary Bridgehampton National Bank as regulatory capital.

Sandler O’Neill + Partners LP is the bookrunner, and Keefe, Bruyette & Woods is the co-manager.

Bridge is a Bridgehampton, N.Y., bank holding company.

Disney firms

Walt Disney’s 2.15% notes due 2020 headed out at 69 bps bid, 66 bps offered in secondary trading on Tuesday, according to a trader.

Walt Disney sold $750 million of the notes on Monday at a spread of Treasuries plus 70 bps.

The company’s tranche of 3.15% notes due 2025 tightened to 96 bps bid, 93 bps offered on Tuesday. Walt Disney sold $750 million of the notes at 100 bps over Treasuries.

The entertainment and media company is based in Burbank, Calif.

St. Jude improves

St. Jude Medical’s new 3.875% notes due 2025 were quoted tighter in early trading on Tuesday at 171 bps offered, according to a market source.

St. Jude Medical sold $500 million of the notes (Baa2/A/A-) at 175 bps over Treasuries on Monday as part of a $1.5 billion three-tranche offering.

The maker of cardiovascular medical devices is based in St. Paul, Minn.

Biogen tighter

Biogen’s bonds (Baa1/A-) that priced in the previous week continued to trade about 7 bps to 10 bps tighter than issuance, a market source said earlier in the day.

Biogen’s 4.05% notes due 2025 tightened to 177 bps offered in the secondary market.

Biogen sold $1.75 billion of the 10-year notes on Thursday at 185 bps over Treasuries.

The company’s 5.2% bonds due 2045 were tighter at 216 bps offered.

Biogen priced the $1.75 billion tranche at Treasuries plus 225 bps.

The biopharmaceutical company is based in Cambridge, Mass.

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