Primary active to open week; Credit Suisse, United price; Tyco firms; eBay, Verizon softer

By Cristal Cody and Aleesia Forni

Virginia Beach, July 28 – The high-grade primary bond market saw a rush of new issuance to kick off the week on Monday.

More than $4 billion of new investment-grade paper priced during the session.

The largest deal of the session came from Credit Suisse AG, New York Branch, which priced $1.5 billion of add-ons to its existing notes due 2017 and 2019.

Corporate names also had a solid showing during the session, with new deals pricing from United Airlines, Inc., Tyco Electronics Group SA and Air Products & Chemicals Inc.

United Airlines brought to market $1.06 billion of pass-through certificates in two parts, while Tyco Electronics Group sold $1 billion of senior notes in 18-month, five-year and 10-year tranches.

The primary also saw Air Products price $400 million of notes due 2024 at the tight end of talk.

EQT Midstream Partners LP was also in the primary market on Monday, though details of the sale were unavailable at press time.

Primary activity is likely to be less active as the week moves forward, with the Federal Open Market Committee meeting on Tuesday and Wednesday, coupled with Friday’s jobs data.

Sources are expecting around $15 billion of new paper to price this week.

Investment-grade bonds were mixed over the day, market sources said.

The Markit CDX North American Investment Grade series 22 index headed out flat at a spread of 59 basis points.

Air Products & Chemical’s 3.35% notes due 2024 traded wrapped around issuance in aftermarket trading, according to a trader.

Credit Suisse’s two tranches of reopened notes tightened 1 bp to 2 bps in the secondary market, a trader said.

Tyco’s two tranches of fixed-rate notes tightened 2 bps going out, according to a trader.

In other trading, eBay Inc.’s 3.45% senior notes due 2024 sold on Wednesday widened about 5 bps, a market source said.

Verizon Communications Inc.’s 4.15% senior notes due 2024 have softened in secondary trading over the past month, a market source said.

Credit Suisse adds on

Monday’s primary market saw Credit Suisse sell $1.5 billion of add-ons to its existing senior notes due May 26, 2017 and notes due May 28, 2019, according to a market source and an FWP filed with the Securities and Exchange Commission.

The bank sold a $750 million add-on to its existing 1.375% notes due 2017 at 99.779 with a spread of Treasuries plus 47 bps.

The original $1.75 billion notes due 2017 sold at Treasuries plus 60 bps on May 22.

There was also a $750 million tap of its 2.3% notes due 2019 priced at 99.554, or Treasuries plus 70 bps.

The original $2 billion of notes due 2019 also priced on May 22 with a spread of 80 bps over Treasuries.

Credit Suisse’s 1.375% notes due 2017 firmed to 45 bps bid, 42 bps offered in secondary trading, according to a trader.

The tranche of 2.3% notes due 2019 were quoted slightly tighter at 69 bps bid, 66 bps offered.

Credit Suisse Securities (USA) LLC was the bookrunner.

Proceeds will be used for general corporate purposes.

The financial services company is based in Zurich.

United Airlines pass-throughs

Also on Monday, United Airlines priced $1,061,489,000 in two classes of series 2014-2 pass-through certificates, according to an FWP filing with the SEC.

The deal included $823,071,000 of 3.75% class A certificates (/A-/A) with a final expected distribution date of Sept. 3, 2026 sold at par.

There was also $238,418,000 of 4.625% class B certificates (/BB+/BB+) with a final expected distribution date of Sept. 3, 2022 sold at par.

Credit Suisse Securities and Morgan Stanley & Co. LLC were the lead bookrunners. Bookrunners were Deutsche Bank Securities Inc., Goldman Sachs & Co., Citigroup Global Markets Inc., Barclays, BNP Paribas Securities Corp. and Credit Agricole Securities (USA) Inc.

Proceeds will be used to acquire equipment notes that will be issued to finance the purchase of 15 new Boeing aircraft scheduled for delivery from January 2015 to July 2015 and 12 new Embraer aircraft scheduled for delivery from November 2014 to July 2015.

The airline is based in Chicago.

Tyco three-parter

Tyco Electronics Group was also in Monday’s market, pricing $1 billion of senior notes (Baa1/A-/A-) in three tranches, according to a market source.

The sale included $500 million of floating-rate notes due 2016 priced at par to yield Libor plus 20 bps.

Pricing was on top of talk.

A second tranche was $250 million of 2.35% five-year notes priced at 99.948 to yield 2.361%, or Treasuries plus 65 bps.

Finally, $250 million of 3.45% 10-year notes priced at 99.614 to yield 3.496%, or Treasuries plus 100 bps.

Both fixed-rate tranches sold at the tight end of talk.

In aftermarket trading, Tyco’s 2.35% notes due 2019 traded better at 63 bps bid, 62 bps offered, a trader said.

The 3.45% notes due 2024 firmed to 98 bps bid, 95 bps offered.

Citigroup Global Markets, J.P. Morgan Securities LLC, BofA Merrill Lynch, BNP Paribas Securities and Deutsche Bank Securities were the bookrunners.

Proceeds will be used for general corporate purposes, which may include funding a portion of the company’s merger with Measurement Specialties, Inc.

The notes will be fully and unconditionally guaranteed by TE Connectivity Ltd.

Tyco is a Luxembourg maker of electronic components.

Air Products prices tight

Air Products & Chemicals came to market with a $400 million offering of 3.35% 10-year notes (A2/A/) priced at Treasuries plus 90 bps, according to an informed source.

Air Products & Chemical’s 3.35% notes due 2024 traded mostly unchanged at 90 bps bid, 88 bps offered in the secondary market, a trader said.

Proceeds from the offering will be used for general corporate purposes, including the repayment of commercial paper.

Bookrunners are Barclays, RBS Securities Inc. and Wells Fargo Securities LLC.

Air Products is an industrial gas and chemical maker based in Allentown, Pa.

eBay eases

eBay’s 3.45% notes due 2024 (A2/A/A) were quoted late Monday afternoon at 105 bps, about 4 bps wider from Friday, a market source said.

The company sold $750 million of the notes at Treasuries plus 100 bps on Wednesday as part of a $3.5 billion five-part notes offering.

The global online commerce and payments platform company is based in San Jose, Calif.

Verizon widens

Verizon’s 4.15% notes due 2024 (Baa1/BBB+/A-) traded in the 113 bps area on Monday, according to a market source.

The notes were quoted in the 105 bps area in late June.

Verizon sold $1.25 billion of the 10-year notes on March 10 at 140 bps plus Treasuries.

The telecommunications company is based in New York City.

Bank/broker CDSs flat to higher

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

Bank of America Corp.’s CDS costs ended flat at 69 bps bid, 74 bps offered. Citigroup Inc.’s CDS costs eased 1 bp to 66 bps bid, 69 bps offered. JPMorgan Chase & Co.’s CDS costs rose 2 bps to 54 bps bid, 57 bps offered. Wells Fargo & Co.’s CDS costs widened 1 bp to 55 bps bid, 60 bps offered.

Merrill Lynch’s CDS costs closed unchanged at 73 bps bid, 78 bps offered. Morgan Stanley’s CDS costs ended 1 bp wider at 70 bps bid, 74 bps offered. Goldman Sachs Group, Inc.’s CDS costs were also 1 bp higher at 74 bps bid, 79 bps offered.

Paul Deckelman contributed to this review.

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