Williams, GATX price as solid demand for high-grade paper continues; Juniper, Kinross tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 27 - Issues from Williams Partners LP and GATX Corp. were among the new deals met with solid demand on Thursday as the high-grade market showed no signs of fatigue following a flood of primary issuance this week.

Williams Partners priced a $1.5 billion two-tranche issue of notes during the session, according to a market source and an FWP filing with the Securities and Exchange Commission.

A $1 billion tranche of 4.3% notes due 2024 sold at Treasuries plus 168 basis points, and a $500 million tranche of 5.4% 30-year bonds sold at Treasuries plus 183 bps.

Both tranches sold at the tight end of talk.

Also on Thursday, GATX sold an upsized $850 million issue of notes in three tranches.

There was $300 million of 1.25% three-year notes priced at 60 bps over Treasuries, $250 million of 2.5% notes due 2019 priced at 105 bps over Treasuries and $300 million of 5.2% 30-year bonds priced with at Treasuries plus 160 bps.

All three tranches of the sale sold at the tight end of talk.

Meanwhile, Kinross Gold Corp. brought a $500 million issue of 5.95% notes due 2024 to market on Thursday.

The Rule 144A and Regulation S deal priced at 335 bps over Treasuries.

Juniper Networks, Inc. priced a $350 million offering of 4.5% 10-year notes on Thursday with a spread of Treasuries plus 187.5 bps.

Pricing was at the tight end of the Treasuries plus 200 bps area talk.

The session also saw a new issue from BB&T Corp., though details of the sale were not available at press time.

"Seeing solid books for all of these [new deals]," a market source said on Thursday.

Sources noted the order book for the new issue from Williams Partners was more than three times oversubscribed, while GATX's new issue was more than six times oversubscribed.

More than $28 billion of high-grade supply has priced so far this week, and demand for new paper remains robust.

"[Issuance] conditions are just excellent," the source added.

Lipper analytics reported an inflow of $2.39 billion into corporate investment-grade funds for the week ended Wednesday. This figure brings the year-to-date total to $1.48 billion of inflows.

New issues traded mostly better in the secondary market, with bonds tighter in general over the day, according to market sources.

The Markit CDX North American Investment Grade series 21 index firmed 1 bp to a spread of 64 bps.

In aftermarket trading, Juniper Networks' 4.5% notes due 2024 tightened 7.5 bps, a trader said.

Kinross Gold's 5.95% notes due 2024 firmed more than 10 bps going out, a trader said.

BB&T's 1% notes due 2017 firmed 1 bp, while the tranche of 2.85% notes due 2021 tightened 3 bps, a trader said.

The longer-dated tranches of notes that GATX priced traded 3 bps to 4 bps tighter, a trader said.

Williams two-parter

Williams Partners was in Thursday's market with a $1.5 billion two-tranche offering of senior notes (Baa2/BBB/), according to a market source and an FWP filing with the SEC.

There was $1 billion of 4.3% notes due 2024 priced at 99.791 to yield 4.326%, or Treasuries plus 168 bps.

A second tranche was $500 million of 5.4% 30-year bonds sold at Treasuries plus 183 bps, or 99.676 to yield 5.422%.

Both tranches of the company's sale priced at the tight end of talk.

BofA Merrill Lynch, Deutsche Bank Securities Inc., RBC Capital Markets LLC, Mitsubishi UFJ Securities (USA) Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to repay amounts outstanding under the company's commercial paper program, to fund capital expenditures and for general partnership purposes.

Williams Partners is a Tulsa, Okla.-based energy infrastructure company.

GATX upsizes

GATX priced an upsized $850 million three-part offering of senior notes (Baa2/BBB/) during Thursday's session, according to a market source and an FWP filed with the SEC.

The sale included $300 million of 1.25% notes due 2017 sold with a spread of 60 bps over Treasuries. Pricing was at 99.941 to yield 1.27%.

A $250 million tranche of 2.5% five-year notes priced at 105 bps over Treasuries. The notes sold at 99.866 to yield 2.527%.

Finally, $300 million of 5.2% bonds due 2044 sold at 99.862 to yield 5.209%, or Treasuries plus 160 bps.

All three tranches of the sale sold at the tight end of talk.

The 1.25% notes were not immediately seen in aftermarket trading. The tranche of 2.5% notes firmed to 102 bps bid, 100 bps offered, a trader said. The company's 5.2% bonds tightened to 156 bps bid, 154 bps offered.

Proceeds will be used to repay $300 million of the company's 8.75% notes due May 15, 2015 and to repay two unsecured floating-rate term loan facilities maturing June 12, 2017 and Dec. 21, 2017.

Proceeds will also be used for general corporate purposes, including working capital and capital expenditures.

The bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC.

There is a change-of-control put at 101.

The transportation leasing service company is based in Chicago.

Kinross new issue

Kinross Gold priced $500 million of 5.95% senior notes (Baa3//BBB-) due 2024 during Thursday's session at 335 bps over Treasuries, according to an informed source and a company press release.

Pricing was at 99.655 to yield 5.996%.

The sale was done under Rule 144A and Regulation S.

Kinross Gold's 5.95% notes due 2024 were quoted in the secondary market better at 322 bps bid, 318 bps offered, according to a trader.

The joint bookrunners were BofA Merrill Lynch, J.P. Morgan Securities LLC, RBC Capital Markets and HSBC Securities.

Proceeds will be used repay a portion of the company's term loan due August 2017.

The mining and gold ore processing company is based in Toronto.

Juniper prices tight

Juniper Networks sold $350 million of 4.5% senior notes (Baa2/BBB/) due 2024 on Thursday with a spread of Treasuries plus 187.5 bps, according to a market source.

The notes priced at 99.847 to yield 4.519%.

Pricing was at the tight end of the Treasuries plus 200 bps area talk.

The notes tightened to 180 bps bid, 177 bps offered in aftermarket trading, according to a trader.

Barclays and Goldman Sachs & Co. ran the books.

Proceeds are being used for general corporate purposes, including working capital, capital expenditures, share repurchases and acquisitions of products, technology or businesses.

The network designer and developer is based in Sunnyvale, Calif.

CDS costs mostly unchanged

Investment-grade bank and brokerage credit default swap prices were mostly unchanged, according to a market source.

Bank of America Corp.'s CDS costs were flat at 69 bps bid, 72 bps offered. Citigroup Inc.'s CDS costs firmed 1 bp to 78 bps bid, 81 bps offered. JPMorgan Chase & Co.'s CDS costs ended flat at 60 bps bid, 63 bps offered. Wells Fargo & Co.'s CDS costs eased 1 bp to 40 bps bid, 43 bps offered.

Merrill Lynch's CDS costs were flat at 71 bps bid, 74 bps offered. Morgan Stanley's CDS costs ended unchanged at 85 bps bid, 88 bps offered. Goldman Sachs Group, In.'s CDS costs were flat at 85 bps bid, 90 bps offered.

Paul Deckelman and Paul A. Harris contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.