Viacom, Dominion, BB&T price; Verizon, AT&T soft; Goldman Sachs mostly flat

By Aleesia Forni and Cristal Cody

Virginia Beach, Dec. 3 – Another stream of issuers made their way to the primary market on Wednesday, pricing $6.45 billion of new investment-grade bonds.

Viacom Inc. sold a two-part $1 billion issue of senior notes.

Both tranches of the deal sold 20 basis points tight of the mid-point of initial price guidance, and the deal garnered a massive orderbook that was more than five times oversubscribed.

The session also saw Dominion Gas Holdings LLC issue $1.4 billion of senior notes in five- and 10-year tranches.

In other primary happenings, BB&T Corp. sold $1.5 billion of five-year senior notes in fixed- and floating-rate tranches.

The primary also hosted smaller-sized deals price from Ameren Illinois Co. and Entergy Arkansas Inc.

There was also a $2 billion offering of notes priced by UnitedHealth Group Inc., though details of the sale were unavailable at press time.

“Very strong day all told,” one market source said.

Wednesday’s primary activity pushes the week’s total supply to a hefty $40.25 billion.

Bonds in the telecom sector traded mostly weaker over the session, a market source said.

Verizon Communications Inc.’s 3.5% notes due 2024 have widened about 5 bps since Monday.

AT&T Inc.’s 3.9% notes due 2024 traded flat to 2 bps softer in the secondary market, the source said.

In other trading, Goldman Sachs Group Inc.’s 3.85% notes due 2024 were mostly unchanged, a source said.

The Markit CDX North American Investment Grade series 23 index firmed 1 bp to a spread of 61 bps on Wednesday.

BB&T prices tight

BB&T Corp. priced $1.5 billion of five-year medium-term senior notes, series E, (A2/A-/A+) in two tranches, according to two separate FWP filings with the Securities and Exchange Commission.

A $200 million tranche of floating-rate notes sold at par to yield Libor plus 71.5 bps.

There was also $1.3 billion of 2.45% notes due 2020 sold at 99.855 to yield 2.48%, or Treasuries plus 87.5 bps.

The notes sold tight of guidance.

The joint bookrunners were BB&T Capital Markets LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used for general corporate purposes, including the acquisition of companies, the repurchase of outstanding common stock, the repayment of maturing obligations and the refinancing of outstanding debt as well as extending credit to, or funding investments in, subsidiaries.

The bank and financial services company is based in Winston-Salem, N.C.

Dominion Gas three-parter

Dominion Gas Holdings priced a $1.4 billion three-tranche offering of senior notes (A2/A-/A-) during Wednesday’s session, according to a market source and an FWP filed with the SEC.

There was $450 million of 2.5% notes due 2019 sold at 99.962 to yield 2.508%.

The notes sold with a spread of 90 bps over Treasuries.

A $450 million tranche of 3.6% 10-year bonds priced at 99.724 to yield 3.633%, or Treasuries plus 135 bps.

Finally, $500 million of 4.6% notes due 2044 sold at 99.37 to yield 4.639%, or with a spread of Treasuries plus 165 bps.

Goldman Sachs & Co., RBS Securities Inc., BNP Paribas Securities Corp. and Scotia Capital (USA) Inc. were the bookrunners.

Dominion Gas plans to use proceeds for general corporate purposes and to repay intercompany debt owed to Dominion Resources Inc.

Dominion Gas is a wholly owned subsidiary of Richmond, Va.-based energy producer and transporter Dominion Resources.

Viacom new issue

Viacom sold $1 billion of senior notes and senior debentures (Baa2/BBB/BBB+) on Wednesday, according to an informed source and an FWP filed with the SEC.

The company sold $400 million of 2.75% notes due 2019 at 99.986 to yield 2.753%, or Treasuries plus 115 bps.

A second tranche was $600 million of 4.85% 20-year debentures sold at 99.543 to yield 4.886%, or Treasuries plus 190 bps.

Both tranches sold at the tight end of price talk.

Morgan Stanley, RBC Capital Markets LLC and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used primarily for the repayment of outstanding debt, including $600 million of 1.25% senior notes due February 2015 and borrowings under its commercial paper program. Remaining proceeds will be used for general corporate purposes, including the repurchase of shares under the company’s share repurchase program.

Viacom is a New York-based entertainment company.

Ameren secured notes

Ameren Illinois priced $300 million of 3.25% senior secured notes (A2/A/A-/) due March 1, 2025 at Treasuries plus 97 bps, according to a market source and an FWP filed with the SEC.

Pricing was at 99.943 to yield 3.257%.

The company intends to use the proceeds of the offering to repay a portion of its short-term debt, consisting of commercial paper issuances and borrowings under the Ameren utility money pool.

BNP Paribas Securities, BofA Merrill Lynch, J.P. Morgan Securities LLC and TD Securities (USA) LLC were the bookrunners.

Ameren Illinois is a subsidiary of St. Louis-based electric and natural gas company Ameren Corp.

Entergy Arkansas mortgage bonds

Entergy Arkansas sold $250 million of 4.95% first mortgage bonds due Dec. 15, 2044 on Wednesday with a spread of 200 bps over Treasuries, according to a market source and an FWP filed with the SEC.

The notes (A3/A-/) priced at the tight end of talk.

Pricing was at 99.288 to yield 4.996%.

Barclays, Goldman Sachs, KeyBanc Capital Markets Inc., SMBC Nikko Securities America, Inc. and Stephens Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes.

Entergy Arkansas is a Little Rock, Ark.-based energy provider.

Verizon weaker

Verizon’s 3.5% notes due 2024 (Baa1/BBB+/A-) were quoted wider at 139 bps bid, a market source said.

The notes traded at 134 bps bid on Monday.

Verizon sold $2.5 billion of the notes at Treasuries plus 135 bps on Oct. 22.

The telecommunications company is based in New York City.

AT&T eases

AT&T’s 3.9% notes due 2024 (A3/A-/A) traded flat to 2 bps wider at 133 bps bid, according to a market source.

AT&T sold $1 billion of the notes on March 5, 2014 at a spread of Treasuries plus 125 bps.

The telecommunications company is based in Dallas.

Goldman steady

Goldman Sachs’ 3.85% notes due 2024 (Baa1/A-/A) traded mostly unchanged to 1 bp tighter at 139 bps bid in late afternoon trading, a market source said.

Goldman Sachs sold $2.25 billion of the notes on June 30 at Treasuries plus 135 bps.

The financial services company is based in New York City.

Bank/brokerage CDS costs

Investment-grade bank and brokerage CDS prices were mostly higher on Monday, according to a market source.

Bank of America Corp.’s CDS costs rose 1 bp to 61 bps bid, 64 bps offered. Citigroup Inc.’s CDS costs were also 1 bp higher at 62 bps bid, 65 bps offered. JPMorgan Chase & Co.’s CDS costs were flat at 54 bps bid, 57 bps offered. Wells Fargo & Co.’s CDS costs were flat at 44 bps bid, 47 bps offered.

Merrill Lynch’s CDS costs were 1 bp higher at 63 bps bid, 68 bps offered. Morgan Stanley’s CDS costs ended flat at 74 bps bid, 77 bps offered. Goldman Sachs Group’s CDS costs were unchanged at 76 bps bid, 79 bps offered.

Paul Deckelman contributed to this review.

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