Anheuser, Penske, National Australia Bank bring deals with modest demand; sovereigns eye sales

By Aleesia Forni and Andrea Heisinger

New York, Jan. 14 - Several sovereign issuers stepped into the high-grade bond market on Monday alongside Anheuser-Busch InBev Finance Inc., Penske Truck Leasing Co. LP and PTL Finance Corp., National Australia Bank and Energy Transfer Partners LP.

Anheuser-Busch sold $4 billion in four parts. A source who worked on the trade said there was about $7.8 billion of demand on the books.

"I heard the 30-year [bond] took a while to build," a market source said of the modestly oversubscribed Anheuser sale.

Energy Transfer Partners was in the market with a $1.25 billion sale in 10-year and 30-year maturities. The trade saw roughly $3.6 billion of demand from investors, a market source said.

There was a sale of senior notes from Penske totaling $1 billion of five-year notes and 10-year bonds. The sale was also done under Rule 144A and Reg. S.

National Bank of Australia sold $2.5 billion of notes in three tranches via Rule 144A and Regulation S. The sale included $1 billion of two-year floating-rate notes, $750 million of three-year notes and $750 million of 10-year notes. Terms of the offering were not available at press time Monday.

The Development Bank of Japan announced a $1 billion offering of five-year notes to be priced on Tuesday, while Inter-American Development Bank planned a sale of five-year bonds, also going overnight.

Swedish Export Credit Corp. announced plans for a $250 million offering of floating-rate notes due 2017.

There was a crossover trade of $300 million in five-year notes from Aviation Capital Group Corp.

A $350 million sale of 30-year $25-par fixed-to-floating-rate subordinated notes was priced in the preferred stock market by NuStar Logisitics LP.

Issuance should stay constant on Tuesday, sources said.

"I'm hearing of a couple for tomorrow, but nothing overwhelming," a syndicate source who worked on the Anheuser sale said.

A source who worked on three of the day's high-grade offerings said, "We have one big trade happening, and I'm hearing of a few more things, but nothing crazy."

The Markit CDX Series 18 North American Investment Grade index widened 3 bps to a spread of 89 bps.

Recent issues were trading mostly wider on Monday. Ford Motor Credit Co. LLC's five-year notes were quoted 4 bps weaker during the session.

Comcast Corp.'s $750 million tranche of 2.85% 10-year notes traded flat, while both the $1.7 billion of 4.25% 20-year notes and $500 million 4.5% 30-year bonds were seen trading weaker.

Anheuser's $4 billion trade

Anheuser-Busch InBev Finance was in the market with a $4 billion sale of senior notes (A3/A/A) in three tranches, a market source said.

There was a $1 billion tranche of 0.8% three-year notes sold at a spread of Treasuries plus 43 bps.

A $1 billion tranche of 1.25% five-year notes was priced at 60 bps over Treasuries.

There was $1.25 billion of 2.625% 10-year notes sold at a spread of Treasuries plus 85 bps.

Finally, there's a $750 million tranche of 4% 30-year bonds priced at a spread of Treasuries plus 100 bps. There is a guarantee by Anheuser-Busch InBev SA/NV, Anheuser-Busch InBev Worldwide Inc., Brandbev S.a.r.l., Brandbrew SA, Cobrew NV and Anheuser-Busch Companies LLC.

Bookrunners were Bank of America Merrill Lynch, Barclays, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and RBS Securities Inc.

Proceeds are being used for general corporate purposes.

Anheuser-Busch last tapped the U.S. bond market in a $7.5 billion sale through Anheuser-Busch Worldwide on July 12, 2012. That offering included 0.8% three-year notes priced at Treasuries plus 50 basis points, 1.375% five-year notes sold at 80 bps over Treasuries and 2.5% 10-year notes priced at Treasuries plus 105 bps.

The brewery is based in Leuven, Belgium.

Energy Transfer deal

Energy Transfer Partners has priced $1.25 billion of senior notes (Baa3/BBB-/BBB-) in two tranches, an informed source said.

The size was initially projected to be between $1 billion and $1.25 billion, the source said.

An $800 million tranche of 3.6% 10-year notes sold at a spread of Treasuries plus 175 bps. The notes were priced at the low end of guidance in the 180 bps area, plus or minus 5 bps.

There was also $450 million of 5.15% 30-year bonds priced at a spread of 215 bps over Treasuries. The tranche sold at the tight end of talk in the 220 bps area, plus or minus 5 bps.

Active bookrunners were Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC.

Proceeds are being used to repay borrowings outstanding under a revolving credit facility.

The energy gathering and transportation company is based in Dallas.

Development Bank of Japan

Development Bank of Japan is preparing a $1 billion sale of five-year notes (Aa3/AA-/) for Tuesday pricing, an informed source said.

There is a do-not-grow provision on the size, the source said.

Bookrunners are Bank of America Merrill Lynch, J.P. Morgan Securities LLC and HSBC Securities (USA) Inc.

The financial services and investment company is based in Tokyo.

Penske sells $1 billion

Penske Truck Leasing and PTL Finance sold $1 billion of senior notes (Baa3/BBB-/BBB+) under Rule 144A and Regulation S without registration rights, an informed source said.

There was $500 million of 2.875% notes due 2018 priced at a spread of Treasuries plus 215 bps. Pricing was at the tight end of talk in the 220 bps area, plus or minus 5 bps.

A $500 million tranche of 4.25% 10-year notes was sold at a spread of Treasuries plus 250 bps. The tranche also sold at the low end of guidance in the 255 bps area, plus or minus 5 bps.

Bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

Proceeds are being used to repay outstanding borrowings under a bank revolving credit facility and to repay U.S. denominated debt under a General Electric Capital Corp. facility.

The global transportation services provider is based in Reading, Pa.

Aviation Capital's crossover

Aviation Capital Group priced a split-rated $300 million issue of non-callable five-year senior notes (/BB+/BBB-) at par to yield 4 5/8% on Monday, according to a market source.

Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC were the joint bookrunners for the quick-to-market issue which was priced on the investment grade desk.

Proceeds will be used for general corporate purposes, including the repayment of debt under the company's revolver.

The issuer is a Newport Beach, Calif.-based commercial jet aircraft leasing and asset management company.

NuStar's hybrid notes

NuStar Logisitics sold $350 million of 7.625% $25-par 30-year fixed-to-floating rate subordinated notes, according to a prospectus filed with the Securities and Exchange Commission.

Price talk was initially 7.75% to 7.875%, a trader said.

Early in Monday's session, the trader saw the notes trade at $24.90 in the gray market. However, by midday that had come down to $24.80 bid, $24.90 offered.

"There's no selling group," the trader said of the expected $200 million deal. "It should do fine."

After the close, a market source pegged the issue at $24.93.

"Trades have been in the range of there up to par," the source said, "nothing above par."

The interest rate on the $25-par notes will be fixed at 7.625% through April 15, 2018. The rate will then rest to Libor plus 673.4 bps.

The debt will be unconditionally and irrevocably guaranteed by NuStar and NuStar Pipeline Operating Partnership LP.

Citigroup Global Markets Inc., RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Interest will be paid on the 15th day of January, April, July and October, beginning on April 15. The interest rate will be fixed through April 15, 2018, at which time the rate will begin floating at Libor plus a spread.

NuStar will apply to list the notes on the New York Stock Exchange under the ticker symbol "NSS."

Proceeds will be used for general corporate purposes, including the repayment of outstanding borrowings under a revolving credit facility. The company might use said facility to fund a portion of its TexStar NGL acquisition.

NuStar is a San Antonio-based provider of storage and transportation for petroleum products.

Ford notes weaken

Ford Motor Credit Co. LLC's $1.25 billion of 2.375% five-year notes were trading 4 basis points weaker during the session at 175 bps bid, 170 bps offered, a trader said.

The notes were quoted at 171 bps bid, 167 bps offered on Friday.

The Dearborn, Mich.-based financing arm of automaker Ford Motor Co. sold the notes to yield Treasuries plus 168 bps on Dec. 8.

Comcast unchanged to wider

In other secondary activity, Comcast Corp.'s $750 million tranche of 2.85% 10-year notes was unchanged from levels seen Thursday at 103 bps bid, 98 bps offered.

The notes priced at a spread of Treasuries plus 100 bps.

The trader quoted the $1.7 billion of 4.25% 20-year notes 2 bps weaker at 129 bps bid, 123 bps offered. The notes were sold at a spread of 125 bps over Treasuries.

Meanwhile, the $500 million tranche of 4.5% 30-year bonds was wider at 146 bps bid, 141 bps offered. The bonds were sold at Treasuries plus 145 bps.

The Philadelphia-based telecommunications company priced the notes on Dec. 8.

Stephanie N. Rotondo contributed to this review

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