BMW, Home BancShares price; CubeSmart taps two bonds; AT&T tightens; Verizon softens

By Cristal Cody

Tupelo, Miss., March 30 – Issuance was steady over Thursday’s session with a handful of issuers in the primary market.

BMW US Capital, LLC brought a $2.2 billion five-part offering of notes during the session.

Home BancShares, Inc. priced $300 million of 10-year fixed-to-floating-rate subordinated notes.

CubeSmart, LP priced $100 million in reopenings of two existing bonds.

Also on Thursday, Allina Health System placed $150 million of 30-year taxable bonds.

The Markit CDX North American Investment Grade index firmed about 1 basis point on Thursday to close at a spread of 67 bps.

In the secondary market, AT&T Inc.’s 4.25% notes due March 1, 2027 traded about 2 bps better.

Verizon Communications Inc.’s 4.125% notes due March 16, 2027 softened about 5 bps over the day.

BMW prices $2.2 billion

BMW US Capital priced $2.2 billion in five tranches of notes (A1/A+/) in a Rule 144A and Regulation S offering on Thursday, a market source said.

The company sold $250 million of three-year floating-rate notes at Libor plus 38 bps.

BMW priced $600 million of 2.15% three-year fixed-rate notes at a spread of Treasuries plus 67 bps.

The $250 million tranche of five-year floating-rate notes priced at Libor plus 64 bps.

BMW sold the $600 million offering of 2.7% five-year fixed-rate notes at a spread of 77 bps over Treasuries.

The company also placed $500 million of 3.3% 10-year notes with a 95 bps spread over Treasuries.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBC Capital Markets LLC and SG Americas Securities, LLC were the lead managers.

Woodcliff Lake, N.J.-based BMW US Capital is the U.S. financing arm for the BMW German auto manufacturer.

Home BancShares fixed/floaters

Home BancShares priced $300 million of 5.625% 10-year fixed-to-floating-rate subordinated notes on Thursday at 99.997, according to an FWP filing with the Securities and Exchange Commission.

The notes due April 15, 2027 (Kroll: BBB-) priced with a spread of 320.7 bps over Treasuries.

The notes convert to a floating rate of Libor plus 357.5 bps beginning April 15, 2022.

RBC Capital Markets, Sandler O’Neill + Partners, LP and Stephens Inc. were the bookrunners.

The notes are non-callable for five years.

Proceeds will be used for general corporate purposes.

Home BancShares is the Conway, Ark.-based bank holding company for Centennial Bank.

CubeSmart prices add-ons

CubeSmart (Baa2/BBB/) sold $100 million in reopenings to its 4.375% senior notes due Dec. 15, 2023 and 4% senior notes due Nov. 15, 2025 on Thursday, according to an FWP filing with the SEC.

CubeSmart priced $50 million in a tap of its 4.375% notes due 2023 at 105.04 to yield 3.495% and a spread of Treasuries plus 155 bps.

The company originally sold $250 million of 4.375% notes on Dec. 10, 2013 at 98.995 to yield 4.501% and a spread of 170 bps over Treasuries.

The $50 million add-on to the 4% notes due 2025 priced at 101.343 to yield 3.811%, or a Treasuries plus 140 bps spread.

The company originally sold $250 million of 4% notes on Oct. 19, 2015 at 99.735 to yield 4.032%, or a spread of 200 bps over Treasuries.

Wells Fargo Securities LLC, BofA Merrill Lynch and U.S. Bancorp Investments Inc. were the bookrunners.

The notes are guaranteed by CubeSmart.

Proceeds will be used to repay all of the debt incurred under the revolving portion of the company’s credit facility, for working capital and for other general corporate purposes, which may include other debt repayments or repurchases.

The real estate investment trust of self-storage facilities is based in Wayne, Pa.

Allina Health brings bonds

Allina Health System sold $150 million of 4.43% 3(a)(4) exempt 30-year taxable bonds at a spread of Treasuries plus 140 bps on Thursday, according to a market source.

The series 2017 bonds due April 15, 2047 (Aa3/AA-/AA-) priced tighter than initial price thoughts in the Treasuries plus 145 bps area.

J.P. Morgan Securities was the bookrunner.

Proceeds will be used for general corporate purposes.

Allina Health System is a Minneapolis-based health care system.

AT&T stronger

AT&T’s 4.25% notes due March 1, 2027 headed out about 2 bps tighter at 165 bps bid, according to a market source.

The company priced $2 billion of 4.25% notes due March 1, 2027 (Baa1/BBB+/A-) on Jan. 31 at a spread of Treasuries plus 180 bps.

AT&T is a Dallas-based telecommunications company.

Verizon softens

Verizon Communications’ 4.125% notes due March 16, 2027 eased about 5 bps on Thursday to 155 bps bid, a market source said.

Verizon sold $3.25 billion of the notes (Baa1/BBB+/A-) on March 13 at a spread of Treasuries plus 160 bps.

The telecommunications company is based in New York City.

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