Tyson Foods, Comcast sell notes; Tyson tightens; Dollar General, Family Dollar active

By Aleesia Forni and Cristal Cody

Virginia Beach, Aug. 5 – Tyson Foods Inc. and Comcast Corp. came to Tuesday’s primary, each bringing multi-billion-dollar deals to market.

Tyson Foods sold a four-part, $3.25 billion offering of senior notes to fund the company’s proposed acquisition of Hillshire Brands Co.

The four tranches sold around 10 basis points to 20 bps tight of initial price guidance, a source said.

Meanwhile, Comcast came to market with a $2 billion offering of senior notes sold in two maturities.

In forward calendar news, Federal Home Loan Banks announced plans to price a $3 billion offering of global bonds.

The deal is slated to price on Wednesday.

One source noted the tone to the quiet Tuesday was “maybe a little weaker” compared to Monday’s session.

In total, the investment-grade primary market has seen roughly $6.6 billion of supply this week.

The slower pace of issuance is expected to continue as the week progresses.

New issues traded mostly better in the secondary market, while high-grade credit spreads headed out weaker, market sources said.

The Markit CDX North American Investment Grade series 22 index was seen 1 bp to 2 bps wider at a spread of 66 bps.

Tyson’s four-part offering of notes tightened 6 bps to 10 bps in aftermarket trading, according to a trader.

The two tranches that Comcast brought during the session traded 1 bp to 2 bps softer on the bid side, a trader said.

Bonds from Dollar General Corp. and Family Dollar Stores, Inc. were active over the session, a trader said.

The trades follow reports that Dollar General is considering a bid for the rival discount retailer, a week after Dollar Tree Inc. announced it would acquire Family Dollar for $8.5 billion in cash and stock.

Dollar General’s 3.25% senior notes due 2023 traded about 2 bps wider from where the notes priced more than a year ago, according to a trader.

Family Dollar’s 5% senior notes due 2021 have moved out 85 bps from where the notes came in 2011.

Tyson prices tight

Tuesday’s primary saw Tyson Foods sell $3.25 billion of senior notes (Baa3/BBB/BBB) in four parts, according to a market source and an FWP filed with the Securities and Exchange Commission.

The company priced $1 billion of 2.65% senior notes due 2019 at 99.934 to yield 2.664%, or Treasuries plus 100 bps.

There was also $1.25 billion of 3.95% 10-year notes priced with a spread of Treasuries plus 150 bps.

The notes sold at 99.696 to yield 3.987%.

A third tranche was $500 million of 4.875% 20-year bonds at 99.986 to yield 4.876%, or Treasuries plus 160 bps.

Finally, $500 million of 5.15% bonds due 2044 sold with a spread of Treasuries plus 190 bps.

Pricing was at 99.605 to yield 5.176%.

Tyson’s 2.65% notes due 2019 tightened to 94 bps bid in aftermarket trading, a trader said.

The 3.95% notes due 2024 firmed to 143 bps bid, 140 bps offered late afternoon.

The company’s 4.875% notes due 2034 tightened 10 bps to 150 bps bid, 149 bps offered in the secondary market, the trader said.

The 5.15% bonds due 2044 headed out 10 bps better at 180 bps bid, 175 bps offered.

Joint bookrunners for the five-year notes were J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, HSBC Securities (USA) Inc. and Mizuho Securities USA Inc.

For the 10-year notes, joint bookrunners were JPMorgan, Morgan Stanley, Rabo Securities USA, Inc. and U.S. Bancorp Investments Inc.

JPMorgan, Morgan Stanley, HSBC Securities and Mizuho Securities were the joint bookrunners for the 20-year bonds.

Finally, Morgan Stanley, JPMorgan, Rabo Securities and U.S. Bancorp were the bookrunners for the 30-year bonds.

Proceeds will be used to fund the acquisition of Hillshire Brands Co. and to pay related fees and expenses.

The meat and food production company is based in Springdale, Ark.

Comcast sells $2 billion

Also on Tuesday, Comcast sold a $2 billion offering of senior notes (A3/A-/A/) in two parts, according to an FWP filed with the SEC.

A $1 billion tranche of 3.375% 10.5-year notes priced at 99.912 to yield 3.385%, or Treasuries plus 90 bps.

There was also $1 billion of 4.2% 20-year bonds priced at 99.624 to yield 4.228%, or Treasuries plus 95 bps.

Comcast’s 3.375% notes due 2025 traded wider on the bid side at 92 bps bid, 90 bps offered, a trader said.

The 4.2% notes due 2034 eased to 96 bps bid, 93 bps offered, according to the trader.

Proceeds will be used for working capital and general corporate purposes, which may include the repayment of debt maturing in 2015.

Credit Suisse Securities (USA) LLC, JPMorgan, Lloyds Securities Inc., Mizuho Securitiesvand SunTrust Robinson Humphrey Inc. are the bookrunners.

Comcast is a Philadelphia-based provider of entertainment, information and communication products and services.

FHLB plans deal

Federal Home Loan Banks announced plans to offer $3 billion of two-year global bonds, according to a company news release.

The issue is expected to price on Wednesday, and the bond will mature on Sept. 28, 2016.

Lead managers for this issue will be Barclays, HSBC Securities and Morgan Stanley.

Eight co-managers and a distribution group will complete the syndication team.

FHLBanks are 12 government-sponsored funding providers.

Dollar General mostly flat

Dollar General’s 3.25% notes due 2023 traded at 157 bps bid, 149 bps offered over the session, a trader said.

The company sold $900 million of the notes on April 8, 2013 at a spread of Treasuries plus 155 bps.

Dollar General is a Goodlettsville, Tenn.-based discount retail company.

Family Dollar wider

Family Dollar Stores’ 5% notes due 2021 were seen on Monday at 260 bps bid, a trader said.

Family Dollar sold $300 million of the notes on Jan. 25, 2011 at Treasuries plus 175 bps.

The retail discount store chain operator is based in Matthews, N.C.

Bank/brokerage CDS costs rise

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

Bank of America Corp.’s CDS costs ended 2 bps wider at 74 bps bid, 77 bps offered. Citigroup Inc.’s CDS costs also rose 2 bps to 72 bps bid, 75 bps offered. JPMorgan Chase & Co.’s CDS costs increased 2 bps to 59 bps bid, 64 bps offered. Wells Fargo & Co.’s CDS costs were flat at 46 bps bid, 51 bps offered.

Merrill Lynch’s CDS costs increased 2 bps to 78 bps bid, 82 bps offered. Morgan Stanley’s CDS costs ended 2 bps wider at 79 bps bid, 84 bps offered. Goldman Sachs Group, Inc.’s CDS costs were 1 bp higher at 84 bps bid, 89 bps offered.

Paul Deckelman contributed to this review.

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