GE Capital, Humana, Western Union, utilities tap market; new Intel notes active, trade better

By Aleesa Forni and Andrea Heisinger

New York, Dec. 5 - Investment-grade bond issuance showed no sign of letting up on Wednesday as a torrent of mostly smaller-size sales came to the market.

General Electric Capital Corp. sold $1.7 billion of senior secured notes in three tranches. The sale included three-year floating-rate notes and fixed-rate notes due 2015 and 2019.

There was an upsized $750 million of notes from Western Union Co. priced in three-year and five-year tranches. The size was increased from $500 million, a source said.

Humana Inc. priced $1 billion of senior notes in two parts to help pay for an acquisition.

Real estate investment trust Liberty Property LP was in the market with an upsized $300 million deal of 10-year senior notes.

Utilities make a strong showing, including a $250 million offering of 30-year debentures from Wisconsin Electric Power Co.

Entergy Mississippi, Inc. priced $250 million of 10-year mortgage bonds, and Narragansett Electric Co. sold $250 million of 30-year notes via Rule 144A and Regulation S.

Apartment community manager and developer AvalonBay Communities, Inc. sold $250 million of medium-term notes due 2023.

Meanwhile, Starwood Hotels & Resorts Worldwide, Inc. tapped the market for an upsized $350 million of 10-year senior notes. The size of the sale was increased from $250 million.

NetApp, Inc. announced its first sale of senior notes. The sale had not been priced as of press time, sources said.

Demand remained for high-grade bonds, as many of the sales were several times oversubscribed. GE Capital's sale, for instance, was nearly five times oversubscribed.

"It should keep heating up tomorrow," a market source said. "I know there are at least a handful of things on tap."

Many issuers have been looking past headlines about the fiscal cliff talks and other negative news as they look to price bonds before the end of the year.

The Markit CDX Series 18 North American Investment Grade index was 2 bps tighter at a spread of 98 bps on Monday.

In the secondary market, the 1.35% five-year tranche of Intel Corp.'s $6 billion deal was among Wednesday's most actively traded issues.

The notes due 2032 were also one of the day's biggest movers.

In bank paper, Bank of America's 7.375% notes due 2014 and Bank of Nova Scotia's 2.55% notes due 2017 were weaker on the day.

Citigroup's 6.375% notes due 2014 were seen trading 8 bps better.

GE Capital secured notes

General Electric Capital sold $1.7 billion of senior secured notes (A1/AA+/) in three parts, an informed source said.

Demand for the trade was strong, with about $8.2 billion total on the books, the source said. There was about $3.9 billion of interest for the fixed-rate three-year notes, $1 billion on the three-year floating-rate notes and about $3.3 billion for the seven-year maturity.

The sale included $400 million of three-year floaters priced at par to yield Libor plus 60 bps.

A $1 billion tranche of 1% three-year notes sold at a spread of Treasuries plus 72 bps.

Finally, there was $300 million of 2.1% seven-year bonds priced at a spread of 110 bps over Treasuries. Goldman Sachs & Co. and Citigroup Global Markets Inc. were bookrunners.

Proceeds are being used for general corporate purposes.

The notes feature a security interest in certain aircraft and related assets.

The funding unit of General Electric Co. is based in Norwalk, Conn.

Humana offers $1 billion

Humana priced $1 billion of senior notes (Baa3/BBB/BBB), an informed source said.

A $600 million tranche of 3.15% 10-year notes priced at a spread of Treasuries plus 160 bps.

There was $400 million of 4.625% 30-year bonds sold at a spread of 185 bps over Treasuries.

Active bookrunners were Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

A portion of the proceeds are being used to pay the acquisition price for Metropolitan Health Networks, Inc., to retire Metropolitan debt, along with related fees and expenses.

There is a mandatory redemption if the Metropolitan acquisition is not done by May 31, 2013.

Humana last price bonds in a $750 million sale in two tranches on June 2, 2008. That offering included 7.2% 10-year notes sold at 325 bps over Treasuries and 8.15% 30-year bonds priced at 350 bps over Treasuries.

The health care and insurance company is based in Louisville, Ky.

Western Union prices tight

Western Union tapped the market with an upsized $750 million sale of notes (A3/A-/A-) in two tranches, an informed source said.

The size increased from $500 million, the source said.

A $250 million tranche of 2.375% three-year notes priced at a spread of Treasuries plus 212.5 bps. The notes sold at the tight end of guidance in the 215 bps area, plus or minus 2.5 bps.

There was also a $500 million tranche of 2.875% five-year notes sold at a spread of 237.5 bps over Treasuries. The notes sold at the low end of talk in the 240 bps area, plus or minus 2.5 bps.

Bookrunners were J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

Proceeds are being used for general corporate purposes, including stock repurchase and debt repayment.

Western Union was last in the market with a $400 million sale of seven-year notes on Aug. 17, 2011.

The money movement and payment services company is based in Englewood, Co.

Starwood sells 10-years

Starwood Hotels & Resorts Worldwide has sold an upsized $350 million of 3.125% 10-year senior notes (Baa2/BBB/BBB) in Wednesday's market at a spread of Treasuries plus 158 bps, an informed source said.

The size of the trade was increased from $250 million. Pricing was done tighter than whispered talk in the 170 bps to 175 bps range and at the low end of revised guidance in the 160 bps area, plus or minus 2 bps, the source said.

There was about $1.5 billion of investor demand for the trade, with the source saying there "weren't many drops, actually" when the spreads were tightened significantly during pricing.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were bookrunners.

Proceeds are being used to repurchase existing notes in a cash tender offer and to pay accrued interest on existing notes and any tender premiums plus related fees and expenses.

The hotel and leisure company is based in Stamford, Conn.

Liberty Property upsizes

Liberty Property was in the market with an upsized $300 million sale of 3.375% senior notes due 2023 (Baa1/BBB/BBB+) priced at Treasuries plus 180 bps, according to an FWP with the Securities and Exchange Commission.

The size of the trade was increased from $250 million, a source said.

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

Proceeds are being used to repay a portion of debt under a $500 million credit facility and for general corporate purposes.

Liberty was last in the market with a $400 million offering of 4.125% 10-year notes priced at 250 basis points over Treasuries on June 6.

The real estate investment trust for industrial and office properties is based in Malvern, Pa.

Wisconsin Electric's long bond

Wisconsin Electric Power has priced $250 million of 3.65% 30-year debentures (A2/A-/A+) at a spread of Treasuries plus 90 bps, according to an FWP with the Securities and Exchange Commission.

Bookrunners were Barclays, Goldman Sachs & Co., Mitsubishi UFJ Securities (USA) Inc. and Morgan Stanley & Co. LLC.

Proceeds are being used to repay short-term debt, for working capital and for general corporate purposes.

Wisconsin Electric last tapped the bond market for a $300 million sale of 2.95% 10-year notes at Treasuries plus 105 basis points on Sept. 7, 2011.

The electric, natural gas and steam utility subsidiary of Wisconsin Energy Corp. is based in Milwaukee.

Entergy's mortgage bonds

Entergy Mississippi was in the market with a $250 million of 3.1% first mortgage bonds due in 2023 (Baa1/A-/) to yield Treasuries plus 155 basis points, a market source said.

Pricing was at the tight end of guidance in the 160 bps area, plus or minus 5 bps.

BNY Mellon Capital Markets, J.P. Morgan Securities LLC and Mitsubishi UFJ Securities (USA) Inc. were bookrunners.

Proceeds are being used to repay borrowings from Entergy system money pool, repay borrowings under three credit facilities totaling $70 million, to repay $100 million of 5.15% debt maturing in Feb. of 2013 and for general corporate purposes.

The electric utility is based in New Orleans.

AvalonBay prices 2023

AvalonBay Communities was in the market with a $250 million sale of medium-term notes due 2023 (Baa1/BBB+/) priced at 99.22, according to an FWP filing with the SEC.

Complete terms were not available at press time.

Goldman Sachs & Co. was lead bookrunner. J.P. Morgan Securities LLC and UBS Securities LLC assisted on the sale.

Proceeds are being used for general corporate purposes, including repayment of a portion of debt expected to be assumed in connection with the acquisition of the Archstone Portfolio, or the repayment of a portion of current outstanding debt.

The manager and developer of apartment communities is based in Arlington, Va.

Narragansett's private sale

Narragansett Electric sold $250 million of 4.17% 30-year bonds (A3/A-/) at a spread of Treasuries plus 140 bps, a source away from the trade said.

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

Bank of America Merrill Lynch and J.P. Morgan Securities LLC are bookrunners.

The electric and gas utility is based in Providence, R.I.

Intel notes firm

Intel's $6 billion sale was trading better on Wednesday, a market source said.

The $3 billion tranche of 1.35% five-year notes was quoted 11 basis points tighter at 64 bps bid, 62 bps offered.

The notes priced with a spread of 75 bps over Treasuries.

The $1.5 billion of 2.7% 10-year notes that were sold with a spread of 115 bps over Treasuries were trading at 109 bps bid, 106 bps offered at midday.

The $750 million tranche of 4% 20-year notes was quoted 13 bps better at 117 bps bid, 112 bps offered.

The notes were sold with a spread of Treasuries plus 130 bps.

A $750 million tranche of 4.25% 30-year bonds was trading 2 bps better at 148 bps bid, 141 bps offered.

The notes priced with a spread of Treasuries plus 150 bps.

The semiconductor chip maker is based in Santa Clara, Calif.

Bank of America widens

In other trading, Bank of America's 7.375% notes due 2014 weakened 1 bps to 111 bps bid during Wednesday's session.

The bank priced $3 billion notes due 2014 at Treasuries plus 537.5 bps on May 8, 2009.

Citi trades better

In other trading, Citigroup's 6.375% notes due 2014 tightened 8 bps to 113 bps bid from Tuesday's levels.

The bank priced $2.5 billion five-year notes at Treasuries plus 380 bps on Aug. 5, 2009.

Bank Nova weaker

Meanwhile, Bank of Nova Scotia's 2.55% notes due 2017 were trading 7 bps wider at 37 bps bid.

The notes sold with a spread of 172 bps over Treasuries on Jan. 5.

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