BP Capital, Enterprise Products bring deals as positive tone holds; AT&T mixed

By Cristal Cody and Aleesia Forni

Virginia Beach, Feb. 5 - The high-grade bond market saw another strong session on Wednesday, as new deals from BP Capital Markets plc and Enterprise Products Operating LLC were met with robust demand.

BP Capital sold the day's largest deal, pricing a $2.5 billion issue of senior notes in three tranches, a source said.

BP priced $250 million of five-year floaters at par to yield Libor plus 54 basis points and $1 billion of 2.24% five-year notes with a spread of Treasuries plus 75 bps.

There was also a $1.25 billion of 3.81% 10-year notes sold with sold at Treasuries plus 115 bps.

Pricing was at par.

Both fixed-rate tranches were priced at the tight end of talk, which had been tightened from earlier guidance.

Enterprise Products Operating also sold both tranches of its $2 billion sale tight of talk.

The company came to market with $850 million of 3.9% 10-year notes priced at 125 bps over Treasuries.

A second tranche was $1.15 billion of 5.1% notes due 2045 priced at 145 bps over Treasuries.

A source noted that the deal's book was more than three times oversubscribed.

The session also saw Network Rail Infrastructure Finance plc price $500 million of three-year floaters on Wednesday at par to Libor plus 1 bps, an informed source said.

In the preferred stock space, Citigroup Inc. priced a $480 million issue of 6.875% series L noncumulative perpetual preferred stock par on Wednesday.

The deal was upsized from $250 million.

More than $7 billion of supply has priced so far during the week, and one source noted that there could be "a few" new issues hitting the primary in the session ahead.

"[Thursday's session] will probably look a lot like today," he added.

Investment-grade bonds closed the day mostly unchanged, according to a market source.

The Markit CDX North American Investment Grade series 21 index headed out flat at a spread of 73 bps.

In the secondary market, AT&T Inc.'s bonds (A3/A-/A) were mixed, a source said.

BP three-parter

BP Capital Markets priced a $2.5 billion three-part offering of notes (A2/A/) on Wednesday, according to a market source.

The deal included $250 million of five-year floating-rate notes priced at par to yield Libor plus 54 bps.

There was also $1 billion of 2.24% five-year notes priced at par with a spread of Treasuries plus 75 bps.

A 10-year tranche of $1.25 billion of 3.81% notes sold with a spread of Treasuries plus 115 bps.

Pricing was at par.

Both fixed-rate tranches were priced at the tight end of talk, which had been tightened from earlier guidance.

Proceeds will be used for general corporate purposes.

Barclays, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Mitsubishi UFJ Securities and RBS Securities Inc. were the joint bookrunners.

The unit of oil company BP plc is based in London.

Enterprise new issue

Enterprise Products priced $2 billion of senior notes on Wednesday in two tranches, according to an informed source and an FWP filed with the Securities and Exchange Commission.

The sale included $850 million of 3.9% 10-year notes sold with a spread of Treasuries plus 125 bps, or 99.811, to yield 3.923%.

There was also a $1.15 billion tranche of 5.1% notes due 2045 that priced at 145 bps over Treasuries. The notes priced at 99.845 to yield 5.11%.

The bookrunners were Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., Mizuho Securities USA Inc., Credit Suisse Securities, Mitsubishi UFJ Securities, RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc.

The company plans to use proceeds from this offering to repay debt, including the repayment of its multi-year revolving credit facility, 364-day credit agreement or commercial paper program, and for general company purposes.

The notes are guaranteed by Enterprise Products Partners LP.

The midstream energy services provider is based in Houston.

Network Rail prices

Network Rail Infrastructure Finance sold $500 million of floating-rate notes due Feb. 13, 2017 on Wednesday at par to yield Libor plus 1 bps, an informed source said.

BofA Merrill Lynch and J.P. Morgan Securities LLC were the bookrunners.

The government-operated rail infrastructure company in Great Britain is based in London.

Citi preferreds

Citigroup sold $480 million of 6.875% series L noncumulative perpetual preferred stock (expected ratings: Ba3/BB+/BB) at par on Wednesday.

The deal was upsized from $250 million.

Citigroup Global Markets is acting as the bookrunning manager. BofA Merrill Lynch, Goldman Sachs & Co., JPMorgan, Morgan Stanley, UBS Securities LLC and Wells Fargo Securities LLC are the joint lead managers.

Dividends on the $25-par paper will be paid on a quarterly basis. The preferreds can be redeemed, in whole or in part, after Feb. 12, 2019 or in whole within 90 days of a regulatory capital treatment event.

The New York-based bank intends to list the new shares on the New York Stock Exchange.

Proceeds will be used for general corporate purposes, which may include funding operating units and subsidiaries, financing possible acquisitions or business expansions and refinancing or extending the maturity of existing debt obligations.

AT&T mixed

AT&T's 5.8% notes due 2019 widened 2 bps on the day to 87 bps offered in the secondary market on Wednesday, according to a market source.

AT&T sold $2.25 billion of the notes on Jan. 29, 2009 at a spread of Treasuries plus 300 bps.

The company's tranche of 6.55% bonds due 2039 firmed 1 bp to 179 bps offered, a source said.

AT&T sold $2.25 billion of the bonds in the Jan. 29, 2009 offering at Treasuries plus 300 bps.

The telecommunications company is based in Dallas.

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